One effective trading strategy that encompasses spot trading, futures, and coin-margined futures is the hedging strategy. Hedging is designed to protect against potential losses by taking opposing positions in different markets, allowing traders to manage risk more effectively while maintaining exposure to price movements.

Here’s how it works across all three:

Spot Trading: A trader buys a cryptocurrency at current market prices (like Bitcoin), holding it in anticipation of long-term price growth. This is the base position.

Futures Trading: Simultaneously, the trader might enter into a short futures contract, betting that the price of Bitcoin will fall in the future. This offsets potential losses from the spot position if the market drops.

Coin-margined Futures: For more advanced hedging, a trader could use coin-margined futures (like Bitcoin-margined contracts). This allows them to lock in leverage on the futures market using Bitcoin itself as collateral, increasing potential returns while still being protected from larger downward movements.

By using all three methods, a trader creates a diversified position that can profit in various market conditions. It’s a sophisticated way to balance risk and reward while maintaining flexibility in a volatile market like crypto.