#MostRecentTradeb 1. Spot Trading
Definition: Buying or selling an asset (e.g., stocks, crypto, commodities) for immediate delivery and ownership.
Ownership: Yes, you own the asset.
Leverage: No leverage (you trade only what you have).
Settlement: Instant or near-instant.
Risk: Lower risk since there's no borrowing.
Example: Buying 1 BTC at $50,000 — you pay $50,000 and receive 1 BTC.
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🔹 2. Margin Trading
Definition: Borrowing money or assets from a broker/exchange to trade with more than your own capital.
Ownership: Yes, but with borrowed funds.
Leverage: Yes (e.g., 2x, 5x, or more).
Settlement: Immediate, but you must repay borrowed funds.
Risk: Higher — losses can exceed your initial investment and lead to liquidation.
Example: You have $1,000, use 5x leverage to control $5,000 worth of BTC. If price drops significantly, your position can be liquidated.
