When it comes to cryptocurrency trading, two popular strategies are spot trading and futures trading. *Spot Trading* involves buying and selling cryptocurrencies for immediate ownership and settlement, ideal for long-term investors. You own the asset outright, and the risk is typically lower.

*Futures Trading*, on the other hand, involves buying or selling contracts that represent an obligation to purchase or sell a cryptocurrency at a predetermined future date and price. This strategy offers leverage, allowing for amplified gains, but also increased risk.¹

*Key differences:*

- *Ownership*: Spot trading provides direct ownership, while futures trading involves contract-based trading.

- *Leverage*: Spot trading typically doesn't involve leverage, while futures trading offers high leverage.

- *Risk Profile*: Spot trading has lower risk, while futures trading carries higher risk due to leverage.

- *Settlement Time*: Spot trades settle immediately, while futures trades settle on a specified future date.

When choosing between spot and futures trading, consider your trading goals, risk tolerance, and experience level.²#SpotVSFuturesStrategy