How do Spot, Margin, and Futures trading differ in risk levels

## Risk Levels: Spot vs. Margin vs. Futures Trading

**Spot Trading**

- Lowest risk among the three.

- No leverage is used, so losses are limited to the amount invested.

- Suitable for conservative investors and beginners.

**Margin Trading**

- Higher risk than spot trading.

- Involves borrowing funds to trade larger positions (leverage), which amplifies both gains and losses.

- Losses can exceed your initial investment if the market moves against you.

**Futures Trading**

- Highest risk.

- Uses leverage like margin trading, but also involves contract expiration and potential for rapid liquidation.

- Even small price movements can lead to significant gains or losses, making it suitable only for experienced, risk-tolerant traders.

In summary:

**Spot trading = lowest risk; Margin trading = higher risk; Futures trading = highest risk** due to leverage and contract complexities.