Dual Investment: What Is This And Why You Should Try It?
Binance Dual Investment has been the talk of the town the past month and it is something that everyone should understand. You already know what it is, but do you know why everyone is excited about it? This article will explain everything to do with Binance Dual Investment and how to leverage it to earn high interest yield from your crypto holdings.
What is Binance Dual Investment?
Imagine this scenario: You’ve been trading for some time now and have built up a nice portfolio of digital assets like Bitcoin, Ethereum and BNB. Over the years, you’ve managed to accumulate a nice amount of these cryptos and they’re now sitting in your wallet. You’ve even made some good profits from them in the past by trading them against other cryptos or fiat currencies.
What you probably don’t know is that you can actually earn passive income from your crypto holding by using a Binance Earn feature called Dual Investment. It is a low-risk method that enables you to Buy Low or Sell High crypto at your desired price at your desired date while earning high interest yield.
How does Binance Dual Investment work?
We have two types of Dual Investment. Let’s quickly highlight some key points
) Key terminologies used
- Strike Price = Target Price at which users will have a chance to buy low or sell high.
- Delivery Date = Settlement Date. This is when users will receive the deposited
amount and interest yield.
- Cut off Time — this happens at 10:00 UTC on the Delivery Date. This is the time when we determine whether the user’s asset was executed to BUY LOW or SELL HIGH.
- Subscription Amount = the user’s deposit amount, which the user is hoping to use to buy another currency at a lower price or to sell for another currency on the Settlement Date
1. Up-and-Exercised Gives you the chance to Sell High at the target price by the settlement date. Here is how it works:
Users deposit their crypto assets (non-stablecoins; for example BNB) and select strike price (a limit order price/target price) at which they are hoping to sell this crypto by the delivery date. On the delivery date, if the market price is above this strike price, then the order is filled and the user’s subscription amount and interest income will be SOLD at the strike price. The user will receive returns in BUSD. Let’s see this in action. According to the image below, you will agree with me that the asset chosen is BNB, strike price is 400 BUSD, delivery date is 2022–04–29.
Make sure to choose a desired asset as there are more than 11 assets to choose from. Feel free to choose the desired delivery date and strike price. Next, click subscribe and the next page will show your potential earnings as shown below. Specify how many BNB to commit, read the terms and conditions and submit.
At the cutoff time, if BNB is able to get to at least $400, I will receive 400 BUSD + additional interest of 53.4 BUSD making it a total of 453.4 BUSD.
If BNB didn’t get to at least $400, I will still receive my committed BNB + additional 53.4 BUSD worth of BNB making it a total of 1.133516 BNB.
Let’s take for example, Peter and Paul are good friends, Peter subscribed to Dual investment and Paul didn’t, at the cutoff time,If BNB gets to at least $400, Peter will receive extra 53.4 worth of crypto while Paul will not receive an extra crypto because he didn’t subscribe.
Note: Regardless of whether the SELL HIGH or BUY LOW order is filled or not, the user still receives the interest income. The difference is that if the order is NOT filled, the user receives interest income in the same currency as the deposited currency. However, if the order is filled, the user receives interest income in another currency.
Try it here => https://www.binance.com/en/dual?ref=40560784
2. BUY LOW gives users the opportunity to buy a crypto asset at a low price at the target
price by the settlement date. Here is how to engage in it:
Users deposit their stablecoin (BUSD or USDT) and select strike price (a limit order price / target price) at which they are hoping to buy another currency by the delivery date. On the delivery date, if the market price is below the strike price, then the order is filled and the user’s subscription amount and interest income will be used to BUY the other currency at strike price. Users will receive returns in the bought currency. The steps taken to engage are illustrated and highlighted in red below:
Next, fill in the amount of BUSD to commit, read and accept the terms and conditions. Click subscribe.
Let’s take same example as before, Peter and Paul are good friends and they have 400 BUSD each, Peter subscribed to Dual investment and chose Buy Low and Paul didn’t, at the cutoff time,If BNB gets stays below $400, Peter will receive 1 BNB plus extra 12.99 dollar worth of BNB making it a total of 1.05 BNB while Paul will not receive an extra crypto because he didn’t subscribe.
Again, if BNB goes above $400, Peter gets his 400 BUSD back plus an extra 12.99 BUSD, making it a total of 412.99 BUSD while Paul stays with his 400 BUSD.
Note: Regardless of whether the SELL HIGH or BUY LOW order is filled or not, the user still receives the interest income. The difference is that if the order is NOT filled, the user receives interest income in the same currency as the deposited currency. However, if the order is filled, the user receives interest income in another currency.
Try it here => https://www.binance.com/en/dual?ref=40560784
Spot Limit Order vs Dual Investment
How To Use Dual Investment Feature On Binance Mobile App:
What are the risks involved?
The risk is exactly the same as buying or selling crypto at Spot market with limit order. If I believed that current price is the highest point for BTC, and I decided to sell BTC at this price, however, tomorrow BTC price went further up, then I would have sold BTC at a relatively cheaper price. Vice versa for the buying scenario. Dual Investment is just like buying or selling at spot limit order, but the settlement date (or execution date) is fixed (and user gets
interest income either way). Key risk is that at the user is selecting the buying or selling price
and is not able to cancel that order once the order is made. At the Delivery Date, if the price is further down from your strike price to buy or further up from your strike price to sell, then you would have been better off not using Dual Investment.
Practice what you’ve learnt here Try it here => https://www.binance.com/en/dual?ref=40560784
To learn more, visit https://academy.binance.com/en/articles/a-quick-guide-to-binance-dual-savings?ref=40560784
