#SpotVSFuturesStrategy
Spot and Futures trading are two popular forms of trading in the financial market, especially with cryptocurrencies, stocks, commodities, etc. Below is a simple and easy-to-understand comparison between them:
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🔹 SPOT TRADING (Immediate Trading)
Definition: Buying/selling an asset and owning it immediately.
Example: You buy 1 BTC at $60,000 → You immediately own that 1 BTC.
Characteristics:
Real trading with the asset.
No leverage used (or very limited).
Lower risk, but profits may be slower.
No account liquidation.
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🔸 FUTURES TRADING (Futures Contract)
Definition: Trading based on the prediction of the future price of an asset, without needing to own that asset.
Example: You open a Long position on BTC at $60,000 with x10 leverage → If the price goes up to $61,000, the profit is x10 compared to Spot.
Characteristics:
Can Long (buy) or Short (sell).
Allows leverage (x2, x10, x100...).
High risk, may face account liquidation if losses exceed thresholds.
Do not own the actual asset, only profit/loss according to price fluctuations.
🔁 Quick Comparison:
Criteria Spot Futures
Asset Ownership Yes No
Leverage None or Low Yes, often very high
Risk Low High
Two-way Trading No (buy only) Yes (buy and sell)
Account Liquidation No May occur
💡 In summary:
If you are a long-term investor with little experience → should choose Spot.
If you are proficient in technical analysis and accept high risks → may try Futures.
