#SpotVSFuturesStrategy In spot trading, transactions occur immediately, while in futures trading, they occur on a pre-agreed date in the future.
Spot Trading:
Immediate buying and selling of assets:
Transactions are conducted at the current market price with immediate delivery of the asset.
Direct ownership of the asset:
By purchasing an asset on the spot market, the trader becomes its direct owner.
Simplicity:
Spot trading is considered easier to understand and suitable for beginner traders.
Lack of leverage:
Leverage is usually not used, which reduces potential profits but also minimizes risks.
Futures Trading:
Contracts for future delivery:
Traders enter into contracts to buy or sell an asset at a specified date in the future at a price fixed at the time of contract conclusion.
Non-ownership of the asset:
Holding a futures contract does not imply ownership of the underlying asset.
Potential for high profits:
Due to the use of leverage, futures trading can yield significant profits but also carries increased risk.
Liquidation risk:
When using leverage, there is a risk of position liquidation if the asset's price moves against the trader's position.
Volatility:
Futures markets are more volatile than spot markets due to the use of leverage and speculative components.
In conclusion: Spot trading is suitable for those seeking simplicity and stability, while futures trading may be attractive for experienced traders willing to take high risks for potential high profits.