#SpotVSFuturesStrategy Spot and futures trading have key differences in structure, purpose, and risks, especially in markets like cryptocurrencies or stocks.

Spot Trading:

• Definition: Buying or selling an asset (like Bitcoin) at the current market price for immediate delivery. The exchange occurs "at the moment."

• Ownership: You acquire the actual asset (e.g., you own Bitcoin in your wallet).

• Risk: Limited to the initial investment; there is no mandatory leverage, so you only lose what you invested if the price drops.

• Costs: Generally, you only pay transaction fees (e.g., 0.1%-0.5% on exchanges like Binance).

• Use: Ideal for long-term investors or those who want to physically own the asset.

• Example: You buy 1 BTC at $60,000; if the price rises to $70,000, you gain $10,000.

Futures Trading:

• Definition: Contracts to buy or sell an asset at an agreed price on a future date. You do not own the asset, you only speculate on its price.

• Leverage: Allows trading with margins (e.g., 10x), amplifying gains and losses. An adverse movement can liquidate your position.

• Risk: High due to leverage; you can lose more than your initial investment.

• Costs: Include commissions, funding rates, and possible liquidations.

• Use: Suitable for short-term traders or speculators looking to take advantage of price movements.

• Example: With $6,000 and 10x leverage, you control 1 BTC. If it rises 10%, you gain $6,000; if it drops 10%, you lose everything.

In summary, spot is safer and simpler, ideal for holding assets, while futures are riskier, with greater potential for gain or loss, aimed at experienced traders.