#SpotVSFuturesStrategy
Spot trading involves the immediate purchase and sale of financial instruments, like cryptocurrencies, currencies, or commodities, for instant delivery. Unlike futures or options, there's no deferred settlement; ownership changes hands at the moment of the trade. Participants aim to profit from short-term price fluctuations.
Trades occur on exchanges where buyers and sellers place orders at prevailing market prices. A key advantage is its straightforward nature and direct ownership of the asset. However, it exposes traders to immediate market volatility and requires constant monitoring. Liquidity is crucial, ensuring orders can be filled quickly without significant price impact. While offering direct exposure to market movements, spot trading also carries the risk of substantial losses if prices move unfavorably.
