#TradingTypes101
Spot trading involves buying or selling financial assets—like stocks or cryptocurrencies—for immediate delivery. You pay the full amount upfront, and ownership is transferred instantly. It's straightforward and ideal for beginners due to lower risk and no interest fees.
Margin trading, on the other hand, allows traders to borrow funds to increase their position size. This can amplify gains but also increases risk, as losses are magnified and can exceed the initial investment. Margin traders must maintain a minimum account balance, called a margin requirement, or risk liquidation. It’s best suited for experienced traders with strong risk management.
