🧠 The difference between Spot and Futures in trading: A simplified explanation for beginners
The question is often asked: What is the difference between the Spot market and Futures contracts?
This article provides a simplified explanation to distinguish between them, for understanding purposes only and not as financial advice.
✅ What is Spot?
In the Spot market, cryptocurrencies are purchased and actually owned.
The trader holds the currency and can withdraw it to their wallet.
There is no leverage.
Profits and losses depend solely on actual price movement.
✅ What is Futures?
In Futures contracts, the currency itself is not purchased.
Leverage can be used (for example, 5x or 10x), which increases the risks.
These contracts are linked only to price direction, not to the asset itself.
They are usually used by professional traders to manage risks or profit from declines.
🔚 Conclusion:
Choosing the type of market depends on your experience and trading style.
The Spot market is more suitable for calm investors, while Futures requires precise risk management.
📩 Have you ever tried trading in either of them? Share your thoughts or experiences in the comments.