Leveraged Tokens on Binance are a sort of derivative that provides you with leveraged exposure to the underlying asset.
Leveraged tokens, like other coins, may be bought and sold on the open market.
Every leveraged token is a collection of perpetual contract holdings.
The price level of a leveraged token swings up and down in tandem with price fluctuations in the perpetual contract market.
Before you can start trading Binance leveraged tokens, you need to pass the leveraged token quiz.
The quiz contains 11 questions of varying difficulty.
Get started on Binance here: https://www.binance.com/en/register?ref=73583477 or use “73583477” as the referral code.
Here are the Binance Leveraged Token quiz answers.
- Question 1
- Question 2
- Question 3
- Question 4
- Question 5
- Question 6
- Question 7
- Question 8
- Question 9
- Question 10
- Question 11
1. What is Binance Leveraged Tokens?
Choices:
- Binance Leveraged Tokens is a financial derivative which is similar in nature to traditional leveraged ETFs. Their net asset value may be greatly worn out by short-term market fluctuations. Long term holding of Binance Leveraged Tokens is risky and users should minimise the losses by selling the leveraged tokens from time to time.
- Binance Leveraged Tokens is a cryptocurrency which you can withdraw the tokens out anytime.
- Binance Leveraged Tokens is a futures contract which you adjust leverage level from time to time.
Answer: Binance Leveraged Tokens is a financial derivative which is similar in nature to traditional leveraged ETFs. Their net asset value may be greatly worn out by short-term market fluctuations. Long term holding of Binance Leveraged Tokens is risky and users should minimise the losses by selling the leveraged tokens from time to time.
2. What is the leverage multiplier for Binance Leveraged Tokens?
Choices:
- The system maintains a target leverage range between 1.25x and 4x.
- It is always 4x.
- It is always 1.25x.
Answer: The system maintains a target leverage range between 1.25x and 4x.
3. When does Binance Leveraged Tokens rebalance?
Choices:
- Every 8 hours.
- Every day.
- When the market is volatile or the actual leverage multiplier is out of the target leverage range.
Answer: When the market is volatile or the actual leverage multiplier is out of the target leverage range.
4. What is the worst case scenario of holding Binance Leveraged Tokens on a long term basis?
Choices:
- Binance Leveraged Tokens is a good store of value and the value will increase over time.
- Users can receive interest income for holding Binance Leveraged Tokens on a long term basis.
- The value of Binance Leveraged Tokens can become zero (0) and cannot be recovered due to inherent market risks, high fees, slippage, rebalance algorithm frontrunning and any other perceived unknown risks associated with Binance Leveraged Tokens.
Answer: The value of Binance Leveraged Tokens can become zero (0) and cannot be recovered due to inherent market risks, high fees, slippage, rebalance algorithm frontrunning, and any other perceived unknown risks associated with Binance Leveraged Tokens.
5. Which one of these fees is NOT associated with Binance Leveraged Tokens?
Choices:
- Asset custody fees.
- Trading fees.
- Subscription and redemption fees.
Answer: Asset custody fees.
6. Which one of these is NOT a cost associated with holding Binance Leveraged Tokens?
Choices:
- Daily management fees and reflected directly in the net asset value of the Binance Leveraged Tokens.
- Funding fees for basket positions and reflected directly in the net asset value of the Binance Leveraged Tokens.
- Profit sharing fees.
Answer: Profit sharing fees.
7. By trading Binance Leveraged Tokens, you do not need to maintain margin maintenance and worry about the liquidation risk. However, Binance Leveraged Tokens is not completely risk-free. Which one of these is NOT a risk associated with holding Binance Leveraged Tokens long-term?
Choices:
- Continuing to be charged management fees and funding fees.
- Erosion of net asset value (NAV) due to rebalancing and volatility decay when there is no obvious trend in the market.
- Receiving interest payment.
Answer: Receiving interest payment.
8. Why are subscription and redemption of Binance Leveraged Tokens not recommended during normal trading time?
Choices:
- Subscription and redemption fees are higher than trading fees and there is a limit on how many leveraged tokens users can subscribe or redeem daily.
- Binance Leveraged Tokens is a cryptocurrency which you can withdraw the tokens out anytime.
Answer: Subscription and redemption fees are higher than trading fees and there is a limit on how many leveraged tokens users can subscribe or redeem daily.
9. Which one of these actions is NOT required to complete before trading Binance Leveraged Tokens?
Choices:
- Opening a Margin Account.
- Completing the Binance Leveraged Token questionnaire and agreeing to the terms and conditions in the Binance Leveraged Token Risk Disclosure.
Answer: Opening a Margin Account.
10. What would a responsible trader likely do, if they incur consecutive losses?
Choices:
- Continue trading until they earn back their capital.
- Cut losses timely and control risk exposure.
Answer: Cut losses timely and control risk exposure.
11. As a leveraged tokens trader, you should fully understand the risks associated with leveraged tokens trading and solely responsible and liable for any losses associated with trading activities on your account.
Choices:
- Yes, I agree.
- No, I disagree
Answer: Yes, I agree.
Conclusion
Once you’ve passed the Binance Leverage token quiz, you’ll be able to start trading leveraged tokens on Binance.
Keep in mind that leveraged tokens are not withdrawable.
You can only store them on your Binance account.
There are also fees that come with trading leveraged tokens.
This includes a 0.1% fee per subscription, a 0.1% fee per redemption, and a 0.01% daily management fee.
The trading fee is identical to the spot trading fee.
