Course Content
What Is Shorting in the Financial Markets?
There are countless ways to generate profits in the financial markets. Some traders will use technical analysis, while others will invest in companies and projects using fundamental analysis. As such, you, as a trader or investor, also have many different options to create a profitable trading strategy. However, what if the market is going through a prolonged bear market, where prices are continually declining? What can traders do then to maintain a source of income from trading? Shorting the market allows traders to profit off price declines. Entering a short position can also be an excellent way to manage risk and hedge existing holdings against price risk. In this article, we’ll explain what shorting means, how to short Bitcoin on Binance, and learn about the risks of shorting.
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What Is Shorting in the Financial Markets?
About Lesson
So, let’s say you’d like to short Bitcoin or another cryptocurrency on Binance. You could do so in a few different ways.

How to short Bitcoin on Binance Margin Trading

Firstly, you could short Bitcoin and altcoins on the Binance Margin Trading platform:
  1. Open a margin account, if you haven’t already.
  2. Go to the Binance Margin Trading platform.
  3. Go to your preferred market pair, such as BTC/USDT or BTC/BUSD.
  4. Follow the instructions in our margin trading guide or in this video.

How to short Bitcoin on Binance Futures

You could also short Bitcoin and altcoins on Binance Futures:
  1. Go to Binance Futures.
  2. Select between perpetual or quarterly futures contracts.
  3. Make sure you understand how the platform works by reading our Binance Futures guide.
  4. Follow the instructions in this video.
If you’d like to try out paper trading first, you can go to the Binance Futures testnet. This way, you can test how shorting works without risking real funds.

How to short Bitcoin on Binance Options

Thirdly, you could also try the Binance Options platform that’s available for iOS and Android. Options contracts can also be an excellent way to enter a short position. If you expect the price of Bitcoin to go down, you could buy put options. These give you the right, but not the obligation, to sell Bitcoin at a certain price. Here’s how to do it:
  1. Download the Binance mobile app. The options platform is available for both iOS and Android.
  2. If you haven’t already, activate your Binance Futures account. This is needed to access the options platform on Binance.
  3. Follow the instructions on this page.
It’s worth noting that this is one of the most difficult and high-risk ways to short Bitcoin and cryptocurrencies. Be sure to read our options guide for iOS and Android to know all the required details before you start.
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