$USDC 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: Instant buying and selling of actual assets

- Leverage and Risk:

- Leverage Multiplier: 1x (no leverage)

- Maximum Loss: Principal goes to zero (when the currency 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. Margin Trading

- Core Logic: Using spot assets as collateral to amplify capital

- Leverage and Risk:

- Leverage Multiplier: 2-100x (platform set limit)

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

- Maximum Loss: May exceed the principal