Blockchain & Crypto

Binance Spot Launches Self-Trade Prevention Feature

Binance API users will soon avail of the new Self-Trade Prevention (STP) function for spot trading, to automatically prevent unintentional self-trading

Binance Spot Launches Self-Trade Prevention (STP)


Binance spot trading platform introduced a new Self-Trade Prevention (STP) function that will be available to all API users from January 26, 2023.

Customers trading on Binance Web, Binance App and the Binance Desktop App will not get access to the same feature. The STP function is optional and available exclusively via Binance API. The reason is that other users don’t need this feature much. Self-trading, both intentional and accidental, is extremely difficult to do manually, though it often occurs with fast algorithmic trading, facilitated by API.

What is self-trading?

Self-trading occurs when a user or a group of related users match their own trading orders. It can be done intentionally to create an illusion of trading activity. In this case, such activity is treated as a form of market manipulation and is prohibited per Binance’s terms of use. The exchange has extensive tools to track and investigate intentional self-trading. 

However, sometimes self-trading transactions do not happen on purpose. They may occur by the user’s mistake or when orders get matched accidentally. For instance, separate trading units of the same firm, using the same account, may accidentally post orders that match each other. Coordinating trading strategies efficiently is often difficult for large traders. In such cases, the STP feature will come in handy.

How STP helps prevent self-trade?

The new option allows setting an STP parameter for each spot order to determine the consequences of a potential self-trade. The STP function will also block the execution of an order if it results in a self-trade. It would automatically expire the maker or taker order, according to the user settings.

Therefore, Binance spot traders would be able to run various different trading strategies without any worries about self-trades or extra fees spent on unnecessary order executions.

Nina Bobro

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Nina is passionate about financial technologies and environmental issues, reporting on the industry news and the most exciting projects that build their offerings around the intersection of fintech and sustainability.