#SpotVSFuturesStrategy
What Is Spot Trading?
Spot trading refers to the direct purchase or sale of financial assets where the transaction settles "on the spot," or almost immediately, at the current market price.
This type of trading is common across various markets, including stocks, commodities and forex, where assets are exchanged with minimal delay. Unlike transactions involving contracts, spot trading involves the actual transfer of ownership, meaning the buyer receives the asset quickly, typically within one to two business days.
Spot prices are continuously updated based on real-time supply and demand, which can make spot trading a good fit for investors who want to capitalize on short-term price movements or access immediate market liquidity.
Additionally, spot trading is straightforward in its structure-there are no expiration dates or contractual obligations. This simplicity often attracts retail traders who prefer a more direct, transparent approach to buying and selling.
Spot trading can, however, expose traders to immediate risks if market prices fluctuate unexpectedly, as positions are not hedged or protected by contracts as in other trading methods.
