Spot vs Futures Strategy – Understanding and Proper Application
In the crypto and traditional financial markets, two popular trading forms are Spot (immediate trade) and Futures (futures contracts). Each type has its own characteristics, suitable for different investment strategies.
Spot is the form of buying and selling actual assets at the present time. When you buy BTC on the spot exchange, you truly own that amount of BTC. This is a good choice for long-term investors who want to accumulate assets and are not exposed to risks from leverage or liquidation.
In contrast, Futures are contracts traded based on predictions of future prices, often accompanied by leverage. You can go long when expecting prices to rise, or short when thinking prices will fall. This is a great tool for hedging risks or making quick profits, but it can also easily lead to account liquidation if capital management is poor.
The strategy of combining Spot and Futures is often used for hedging or optimizing profits according to market cycles. Understanding the differences and choosing the right tools is the key to success in trading.
