#SpotVSFuturesStrategy 💹 Spot VS Futures Strategy 💹
Spot Trading:
1. You buy the asset directly and actually own it.
2. There is no leverage or it is very limited, which reduces the potential loss size.
3. Less risky compared to futures contracts, as you do not lose more than you invested.
4. Profits are slower but more stable.
5. No risk of forced liquidation.
🔹Futures Contracts:
1. You do not own the asset, but bet on the price going up or down in the future.
2. Uses leverage (sometimes 10x, 50x, or even 100x), exposing you to quick losses.
3. Extremely risky, and you could lose your entire capital within minutes.
4. Potential profit is fast and high, but it is fraught with risks.
5. Possibility of forced liquidation when the market moves against you, even without losing all your capital.
From a religious perspective:
🔹Spot Trading:
1. Permissible according to most scholars as long as immediate delivery is achieved.
2. Does not involve usury or gambling practices.
3. Considered more in line with Islamic legal standards.
4. Can easily avoid ambiguities by choosing lawful currencies and not using leverage.
🔹Futures Contracts:
1. Prohibited by the majority of scholars due to the presence of uncertainty, gambling, and short selling.
2. There is no actual ownership of the currency or traded asset.
3. Closer to gambling than investing, as it relies solely on price fluctuations.
4. Contains high legal ambiguities and significant financial risk.