How does Binance Dual Investment’s New Auto-Compound Feature work?

Auto-Compound Feature of Binance Dual Investment

Dual Investing provides users with a great opportunity to earn income to buy cryptocurrencies at lower prices or sell cryptocurrencies at higher prices in the future.

When using dual investment to earn compound interest, the user must re-subscribe for a new dual currency investment position on or after the settlement date.

The new automatic reinvestment function can automatically apply for new “buy low” and “sell high” positions.

If you choose the premium plan, Binance will automatically open a new position for you when the target price is reached.

Automatic reinvestment can save you a lot of time. If you are already using dual currency investment, this new feature can help you reinvest automatically, saving you the trouble of manual subscription.

Reinvestment is a time-honored but very basic concept in finance, and you must have learned this term in your math class in school. For traditional savings accounts, reinvestment refers to reinvestment with interest, that is, every time you earn a profit, it is invested in the investment project that generates the income. Therefore, the return on reinvestment is not fixed and will continue to increase. Are you impressed?

Now, let’s take a look at how reinvesting in dual currency investing works.

In dual currency investment, reinvestment not only multiplies the chances of earning cryptocurrency returns, but also sharply increases the risk of losing principal.

Therefore, when subscribing for any reinvestment products, especially dual-currency investment products, you should carefully consider the investment risks.

Next, let’s take a look at how dual-currency investing and the auto-reinvest feature work to understand the risks associated with dual-currency investing auto-reinvesting.

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How does dual currency investing work?

Binance Dual Investment gives users the opportunity to buy cryptocurrencies at an agreed price in the future. Regardless of the market trend, users can earn income during the subscription period. Dual Investment is an alternative to spot trading with limit orders on Binance.

Dual Investment products are divided into two categories: buy low and sell high.

​Buy low products give you the opportunity to buy your favorite cryptocurrency at a lower price in the future. High-sell products give you the opportunity to sell your current cryptocurrency holdings at a higher price in the future.

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Two Common Dual Currency Investment Strategies

Dual currency investment has a variety of strategies to choose from, and you can flexibly apply it according to your own judgment on the current market. These two are the most common strategies:

• Buy Low Sell High: Suitable for users who want to buy at a lower price or sell at a higher price. Dual Investment is favored because users don’t pay transaction fees and can earn cryptocurrency interest from buy or sell orders.
• Increase long-term holdings of cryptocurrencies or stablecoins: suitable for users who have no intention of buying or selling cryptocurrencies but want to earn interest.

Investing always carries risk. These strategies are only suitable for investment connoisseurs who are comfortable with market volatility.

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How to use the automatic reinvestment function in dual currency investment?

In fact, there are two opportunities for automatic reinvestment in dual currency investing. The first is to use the interest earned to reinvest while the target price has not been reached. The second is to reinvest by buying and selling cryptocurrencies after reaching the target price. Of course, you can do all of these operations manually, it just takes some time and effort. It would be more efficient to hand it over to an automated tool.

On the settlement date of any open dual currency investment position, you can automatically re-subscribe for a new position, and the settlement date is the next valid settlement date.

Settlement days for Bitcoin and Ethereum are every Tuesday and Friday. The settlement day for other digital assets is every Friday. 30 minutes before the settlement date, you can choose to enable/disable the automatic reinvestment function.

Basic plan

If the target price is reached, the system will stop the automatic reinvestment, close the position and distribute the income. If the target price is not reached, the system will automatically generate a new position and use the proceeds to reinvest.

For example, if you hold a high sell position, the system will automatically subscribe for a new high sell position and settle it on the next valid settlement day.

Premium plan

If the target price is reached, the system will automatically subscribe for a new position and perform reverse settlement on the next valid settlement date. If the target price is not reached, the system will automatically subscribe for a new position and conduct co-settlement on the next valid settlement day. However, the subscribed product remains unchanged.

For example, if you subscribed for a buy-low product but did not reach the target price, automatic reinvestment will open a new buy-low position for you. If the target price is reached, a new high sell position will be opened.

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Automatic reinvestment saves you time

If you are keen on dual currency investment and want to open a new position after the settlement date, automatic reinvestment can save you the trouble of manual operation.

However, before reinvesting, be sure to carefully consider your risk tolerance and investment strategy. Sometimes, holding the gains for the long term can be a wiser choice. Automatic reinvestment may bring more profit or cause greater loss, so be sure to research this feature in depth before using it.

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