#TradingTypes101

Here’s a simple comparison between Spot, Margin, and Futures trading:

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🟢 Spot Trading

Buy now, own now.

You buy the actual crypto (like Bitcoin) and hold it in your wallet.

Example: You buy 1 BTC at $30,000—you now own 1 BTC.

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🟡 Margin Trading

Borrow money to trade.

You trade more than you own by borrowing from the exchange.

Example: You have $100, borrow $200 to trade $300 worth of crypto.

Higher reward, higher risk—if the trade goes against you, you can lose more than your initial amount.

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🔴 Futures Trading

Bet on the price, don’t own the asset.

You agree to buy or sell crypto at a future price, without actually owning it.

You can profit whether the price goes up or down, using leverage.

Example: You “long” BTC at $30,000—if it goes to $35,000, you profit.

Very risky—you can be liquidated (lose everything) fast if price moves against you.

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🧠 In a Nutshell:

Type Own Asset? Borrowing Direction Risk Level

Spot ✅ Yes ❌ No Only Up 🟢 Low

Margin ✅ Yes ✅ Yes Up/Down 🟡 Medium

Futures ❌ No ✅ Yes Up/Down 🔴 High