Spot trading is the most straightforward type of trading in crypto, stocks, forex, or commodities.
Here’s the breakdown:
📌 Definition:
Spot trading means buying or selling an asset on the spot — at the current market price — and the settlement (ownership transfer) happens almost immediately.
💡 Example in Crypto:
If Bitcoin’s current price is $60,000 and you buy 0.1 BTC for $6,000, that’s a spot trade. You now actually own 0.1 BTC in your wallet.
⚙️ How It Works:
1. Choose a market (e.g., BTC/USDT).
2. Place an order:
Market Order → Buy/Sell instantly at current price.
Limit Order → Set your desired price and wait for the market to reach it.
3. Settlement → Assets are delivered immediately after the trade is matched.
✅ Advantages:
You actually own the asset (can transfer, hold, or sell later).
Simple to understand — no leverage, no complex contracts.
Lower risk compared to futures or margin trading.
⚠️ Risks:
Price can drop after purchase (no protection unless you set stop-loss).
Slower profit potential compared to leveraged trading.
If you want, I can give you a quick visual guide for spot trading on Binance so it’s easy to follow step-by-step.