#SpotVSFuturesStrategy

Spot VS Futures Strategy 💹

Spot Trading:

1. You buy the asset directly and actually own it

2. No leverage or very limited, reducing the potential loss size

3. Less risky compared to futures, as you do not lose more than you invested

4. Profit is slower but more stable

5. No risk of forced liquidation

🔹Futures Contracts:

1. You do not own the asset, but bet on the price rising or falling in the future

2. Uses leverage (sometimes 10x, 50x, or even 100x) exposing you to quick losses

3. Highly risky, and you could lose all capital within minutes

4. Potential profit is fast and high, but fraught with risks

5. Possibility of forced liquidation when the market moves against you, even without losing all capital

From a religious perspective:

🔹Spot Trading:

1. Permissible according to most scholars provided there is actual immediate exchange

2. Does not involve usury or gambling practices

3. Considered more compliant with Islamic legal regulations

4. Can easily avoid doubts by choosing legitimate currencies and not using leverage

🔹Futures Contracts:

1. Prohibited by the majority of scholars due to the presence of uncertainty, gambling, and short selling

2. There is no true ownership of the currency or traded asset

3. Closer to gambling than investing, due to betting solely on price fluctuations

4. Contains significant legal doubts and a high financial risk