#TradingTypes101

Spot, Margin, and Futures Trading: Key Differences

Spot trading is straightforward—you buy and own the actual asset. For example, with 100 USDT, you can buy 1 SOL at SOL/USDT = 100. The SOL is stored in your wallet immediately.

Margin trading lets you borrow funds to increase your buying power. If you have 10 USDT and SOL is priced at 100 USDT, you can use 10x leverage to borrow 90 USDT and buy 1 SOL. You must repay the loan with interest. Profits and losses are magnified, and you risk liquidation if the market moves against you.

Futures trading involves contracts, not real assets. You speculate on price movement using leverage. For instance, with 10 USDT, you can open a 1000 USDT short position on SOL. If the price drops, you profit by buying back cheaper and repaying the position. You don’t own SOL—just the contract.

#TradingTypes101

SOL: 152.37 (-2.33%)