#SpotVSFuturesStrategy Differences Between Spot and Futures Trading – What Should the Investor Know?

Spot and futures trading are two fundamental ways of investing in cryptocurrency markets. Spot trading (immediate) involves buying or selling an asset at the current market price. The transaction is executed immediately, and the investor instantly becomes the owner of the given asset – for example, bitcoin.

On the other hand, futures trading is based on futures contracts. This means that the investor does not physically buy the asset but enters into an agreement to buy or sell it at a specified future date for a predetermined price. Futures are often used for speculation or hedging against price fluctuations. This type of trading also allows for the use of leverage, which increases potential profits but also the risk of losses.

In summary: spot trading is simpler and more transparent, while futures require greater knowledge and involve higher risk but also broader opportunities.

NOTE: the futures market does not forgive; with leverage, you can lose everything!