#SpotVSFuturesStrategy
Spot Trading vs Futures Trading: Strategies and Advantages
*Spot Trading:*
- *Immediate Buy and Sell*: Assets are bought and sold immediately, with instant delivery of the asset.
- *Taking Advantage of Current Prices*: Trading is based on current market prices.
- *Risks*: Risks can be higher due to price volatility.
*Futures Trading:*
- *Futures Contracts*: Contracts are bought and sold that obligate the purchase or sale of a specific asset at a set price on a future date.
- *Hedging*: Futures contracts can be used to hedge against price risks.
- *Speculation*: Futures contracts can be used to speculate on future prices.
*Trading Strategies:*
- *Immediate Purchase and Future Sale*: Buy the asset immediately and sell a futures contract for the same asset.
- *Immediate Sale and Future Purchase*: Sell the asset immediately and buy a futures contract for the same asset.
- *Hedging*: Use futures contracts to hedge against price risks in current assets.
*Advantages and Disadvantages of Each Strategy:*
- *Spot Trading*:
- Advantages: Ease of trading, and taking advantage of current prices.
- Disadvantages: High risks due to price volatility.
- *Futures Trading*:
- Advantages: Ability to hedge, and speculate on future prices.
- Disadvantages: High risks due to price volatility, and the need for...