#SpotVSFuturesStrategy #SpotVSFuturesStrategy

💹 Spot VS Futures Strategy 💹

Spot Trading:

1. You buy the asset directly and actually own it

2. No leverage or very limited, which reduces the potential loss size

3. Less risky compared to futures, as you don't lose more than you invested

4. Profit is slower but more stable

5. No risk of forced liquidation

🔹Futures Contracts:

1. You do not own the asset, but bet on the price rising or falling in the future

2. Uses leverage (sometimes 10x, 50x, or even 100x) which exposes you to quick losses

3. Highly risky, and you could lose all your capital within minutes

4. Potential profit is fast and high, but it is fraught with risk

5. Possibility of forced liquidation when the market moves against you, even without losing all your capital

From a religious perspective:

🔹Spot Trading:

1. Permissible according to most scholars provided that immediate exchange is achieved

2. Does not involve usury or gambling practices

3. Considered more compliant with Islamic legal controls

4. Can easily avoid ambiguities by choosing legitimate currencies and not using leverage

🔹Futures Contracts:

1. Prohibited by the majority of scholars due to the presence of uncertainty, gambling, and short selling

2. There is no real ownership of the currency or traded asset

3. Closer to gambling than investing, due to betting on price fluctuations only

4. Contains high legal ambiguities and significant financial risk