High resolution echelle spectroscopic observations taken with the FEROS spectrograph at the 2.2 m telescope ESO confirm the binary nature of the flare M3.5V star LU Vel (GJ 375, RE J0958-462) previously reported by Christian and Mathioudakis (2002). Emission of similar intensity from both components is detected in the Balmer, Na i D₁&D₂, He i D₃, Ca ii H&K, and Ca ii IRT lines. We have determined precise radial velocities by cross correlation with radial velocity standard stars, which have allowed us to obtain for the first time the orbital solution of the system. The binary consists of two near-equal M3.5V components with an orbital period shorter than 2 days. We have analyzed the behaviour of the chromospheric activity indicators (variability and possible flares). In addition, we have determined its rotational velocity and kinematics.