Spot Trading
1. *Spot Trading*: Assets are bought and sold immediately, with immediate delivery of the assets.
2. *Full Payment*: The full value of the asset is paid upon purchase.
3. *Lower Risks*: Since spot trading does not involve leverage, the risks are lower.
Futures Trading
1. *Futures Contracts*: Futures contracts for assets are bought and sold, with a specified price and delivery date.
2. *Leverage*: Leverage can be used to increase buying power, which increases potential risks.
3. *Hedging and Speculation*: Futures contracts can be used to hedge against risks or speculate on price movements.
Key Differences
1. *Delivery*: In spot trading, the asset is delivered immediately, while in futures trading, a specific delivery date is set.
2. *Leverage*: Futures trading allows for the use of leverage, increasing potential risks.
3. *Purpose*: Spot trading is often used for long-term investment, while futures trading is used for hedging or short-term speculation.
Strategies
1. *Spot Trading*: Strategies such as buy and hold or trading based on technical analysis can be employed.
2. *Futures Trading*: Strategies such as hedging, speculating on price movements, or using leverage to increase returns can be employed.
Summary
Spot trading and futures trading are two different strategies, each with its own advantages and risks.