There are essential differences in asset ownership, sources of leverage, settlement mechanisms, and risk structures among the three types of trading methods in cryptocurrency trading: spot, leverage, and contract.

1. Spot Trading

- Core Logic: Immediate buying and selling of actual assets

- Leverage and Risk:

- Leverage Ratio: 1x (no leverage)

- Maximum Loss: Principal goes to zero (when the coin price drops to 0)

- Typical Scenario:

> Buying 0.025 BTC with 1000 USDT, if BTC rises to 45,000 USDT, profit is 125 USDT (25% increase).

2. Leverage Trading

- Core Logic: Spot collateralized lending amplifies the principal

- Leverage and Risk:

- Leverage Ratio: 2-100x (platform sets the upper limit)

- Forced Liquidation Mechanism: When the value of collateralized assets ≤ borrowed principal + interest, automatic liquidation is triggered.

- Maximum Loss: May exceed the principal