How to short crypto on Binance Futures?

Shorting crypto on Binance Futures lets you profit from falling prices, but use caution—high leverage increases risk of liquidation in volatile markets.

Jul 26, 2025 at 11:57 am

Understanding Short Selling in Crypto Futures

Short selling in crypto futures allows traders to profit from falling prices. When you short a cryptocurrency on Binance Futures, you're essentially borrowing the asset (in this case, a futures contract) and selling it immediately, with the plan to buy it back later at a lower price. The difference between the sell and buy price is your profit — if the market moves as expected. It's crucial to understand that shorting involves high risk, especially in volatile markets like crypto, where prices can swing dramatically in a short time.

Setting Up Your Binance Futures Account

Before you can short any cryptocurrency, ensure your Binance Futures account is activated:

• Log in to your Binance account and navigate to the [Futures] tab.
• If prompted, complete the Futures quiz to verify your understanding of leverage and risk.
• Deposit funds into your Futures wallet — this can be done via the [Wallet > Funding Wallet > Transfer] section.
• Choose the asset you want to trade (e.g., BTC/USDT, ETH/USDT) and make sure you have enough margin to cover your position.
  

  Important: Always start with a small position size when learning how to short. Margin requirements vary depending on the leverage used.

  Choosing the Right Trading Pair and Leverage

  
  Once in the Futures interface:
• Select a trading pair like BTC/USDT or ETH/USDT from the available contracts.
• Decide on your leverage — Binance offers up to 125x for some pairs. For beginners, 5x to 10x is strongly recommended to avoid rapid liquidation.
• Confirm your margin mode: Isolated (risk limited to the allocated margin) or Cross (uses entire wallet balance as collateral).
  

  Note: Higher leverage increases both potential gains and losses. Use leverage cautiously — it directly affects your liquidation price.

  Placing a Short Order Step-by-Step

  
  To execute a short position:
• Set the order type to Market (executes immediately at current price) or Limit (executes only at your specified price).
• In the Buy/Sell panel, click Sell — this indicates a short position.
• Enter the quantity you want to short (e.g., 0.01 BTC).
• Review the estimated liquidation price — this is the price at which your position will be automatically closed to prevent further losses.
• Click Sell BTC (or your chosen asset) to open the short position.
  

  Critical: Always double-check whether the order type is Sell (short) and not Buy (long). A single mistake can lead to unexpected losses.

  Monitoring and Managing Your Short Position

  
  After opening a short:
• Track the position in the Positions tab. Here, you’ll see entry price, liquidation price, unrealized P&L, and margin used.

• Set a Stop-Loss order to limit losses if the market rises unexpectedly. To do this:

  • Go to the Stop-Limit or Stop-Market order type.
  • Set a trigger price above your entry (e.g., if you shorted at $60,000, set stop at $62,000).
  • Enter the quantity and price at which the stop order should execute.
• Consider setting a Take-Profit order to automatically close the position when your profit target is reached.
  

  Pro Tip: Use Trailing Stop orders to lock in profits if the price drops significantly — it adjusts the stop-loss upward as the price falls.

  Closing the Short Position

  
  To close your short:
• Navigate to the Positions tab and locate your open short.
• Click Close — this will automatically place a buy order of the same size to offset your short.
• Alternatively, manually place a Buy order for the same quantity to close the position.
• Check your realized P&L in the Order History or Trade History section.
  

  Important: If you don’t close manually, the position remains open until liquidation or you decide to exit. Monitor it closely, especially during high volatility.

  Frequently Asked Questions

  What happens if my short position gets liquidated?
  
  Liquidation occurs when the market moves against your short and your margin is depleted. Binance automatically closes the position to prevent further losses. You lose the entire margin allocated to that trade. To avoid this, monitor your liquidation price and use stop-loss orders.

  Can I short crypto without using leverage on Binance Futures?
  
  Yes. You can set leverage to 1x, which means you’re trading with your full margin as collateral — no borrowed funds. This reduces risk but also limits potential profit. It’s ideal for conservative traders testing short strategies.

  Is shorting crypto on Binance Futures the same as spot shorting?
  
  No. Spot trading on Binance does not allow direct shorting unless you use options or third-party lending platforms. Futures shorting is built into the contract system — you don’t need to borrow the asset manually; the exchange handles it via margin.

  How do I know if I’ve successfully opened a short position?
  
  Look at the Positions tab. If you see a negative quantity (e.g., -0.01 BTC) and the side says Sell, you’ve opened a short. Also, your unrealized P&L will be positive if the price has dropped since entry.