#TradingTypes101

Spot Trading (Cash)

• What is it? It is the easiest way to trade on Binance or any other exchange that offers this option. How does it work? You buy and sell cryptocurrencies at the current market price, and ownership of the asset is transferred immediately. It's somewhat like going to the bank in person and buying dollars at the official exchange rate.

• It is ideal for beginners or for those who want to hold their investments long-term without complications.

• Advantages:

• No leverage: you only use your own funds.

• Lower risk compared to other modalities.

• Easy to understand and execute.binance.combinance.

• Disadvantages:

• Profits are limited to the capital you invest.

🟡 Margin Trading (Margin)

• What is it? It involves borrowing funds from Binance to increase your buying power and thus open larger positions.

Let's learn:

• Typical leverage: Between 3x and 10x.

• Available modes:

• Isolated margin: Risk is limited to a specific position.

• Cross margin: Risk is shared among all your open positions.

• Advantages:

• Possibility of obtaining greater profits with less initial capital.

• Useful for taking advantage of short-term market movements.binance.com

• Disadvantages:

• Higher risk of significant losses.

• Risk of liquidation if the market moves against your position.

🔴 Futures Trading (Futures)

• What is it? You trade contracts that represent the future value of a cryptocurrency, without needing to own the underlying asset.

• Types of contracts:

• Perpetual futures: They have no expiration date.

• Quarterly futures: They have predetermined settlement dates each quarter.

• Available leverage: Up to 125x, allowing control over large positions with a relatively small initial investment.

• Advantages:

• Allows for profits in both bullish and bearish markets.

• Disadvantages:

• High risk of liquidation due to elevated leverage.

• Complex