Spot Trading vs Future Trading

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Here's a detailed comparison of spot trading and future trading in crypto:

*Spot Trading:*

1. *Immediate Exchange*: Buy or sell cryptocurrencies immediately at the current market price.

2. *No Leverage*: Trade with the capital you have, without borrowing funds.

3. *Ownership*: Take ownership of the cryptocurrencies you buy.

4. *No Expiry*: No expiration date for the trade.

5. *Lower Risk*: Generally considered lower risk due to no leverage and no expiry.

*Future Trading:*

1. *Contractual Agreement*: Agree to buy or sell cryptocurrencies at a set price on a specific date (expiration date).

2. *Leverage*: Trade with borrowed funds, amplifying potential gains and losses.

3. *No Ownership*: Do not take ownership of the cryptocurrencies until the expiration date.

4. *Expiry Date*: Trade expires on the set date, settling at the predetermined price.

5. *Higher Risk*: Considered higher risk due to leverage and expiry, potentially resulting in significant losses.

In summary, spot trading involves immediate exchange and ownership, while future trading involves a contractual agreement, leverage, and no ownership until expiration. Future trading carries higher risks due to leverage and expiry, but also offers potential for amplified gains.