#TradingTypes101

Important aspects of spot trading:

1. You own the asset

• When you buy on the spot, you really become the owner of the asset.

• Example: you bought BTC — it’s in your wallet, you can transfer it, store it, sell it at any time.

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2. No leverage = lower risk

• In spot trading, you do not use borrowed funds, unlike margin or futures trading.

• This means less risk of liquidation, but also lower potential profit from price fluctuations.

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3. Simplicity for beginners

• Spot trading is straightforward: buy cheap — sell higher.

• A great option to start with.

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4. No expiration date

• Unlike futures, spot trades do not have an expiration date. You can hold the asset for years.

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5. You are vulnerable to market decline

• If the asset drops, you lose value (in dollars/USDT). There is no protection against price decreases, as is the case with short positions in futures.

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6. Limited flexibility

• You cannot “short” (sell what you do not have), as you can with futures. Only long (buy — wait for growth).

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7. Fees

• A fee is charged on each trade (for example, on Binance — from 0.1% and lower).

• There is also a spread (the difference between the buying and selling price).