#TradingTypes101

Key Differences Between Spot, Margin, and Futures Trading:

1. Spot Trading

- What it is: Buying/selling assets (like BTC or ETH) at the current market price for immediate ownership .

- Pros: Simple, no leverage risks, direct asset ownership.

- Cons:Limited profit potential compared to leveraged trades.

2. Spot Margin Trading

- What it is: Borrowing funds to amplify trades using collateral (e.g., 10x leverage). You still own the asset but face liquidation risks if prices drop .

- Pros: Higher capital efficiency, ability to short-sell.

- Cons: Interest on borrowed funds, forced liquidation possible.

3. Futures Trading

- What it is: Contracts to buy/sell assets at a future price, with no ownership of the underlying asset. Includes perpetual contracts (no expiry) or dated contracts .

- Pros: High leverage (up to 125x), profit from both rising/falling markets.

- Cons: Complex, time-bound risks, liquidation threats .