In simple terms, spot trading can be understood as buying and selling a commodity. For example, if you have a coin that is priced at 1 dollar, and you buy 10 of them, your total cost is 10 dollars. Later, if the price of this coin rises to 2 dollars, and you sell all 10, you will get 20 dollars, of which 10 dollars is your capital and the other 10 dollars is profit.

Similarly, if the price of this coin later falls to 0.5 dollars and you sell all 10, you will receive 5 dollars, resulting in a loss of 5 dollars. Spot trading is similar to the stock market, which is about buying low and selling high, and you cannot short sell.

Contract trading is a form of financial derivative trading where you buy or sell an asset through a contract instead of directly trading physical assets.

In simple terms, a contract is not a commodity; it is an agreement between you and the platform, a type of option.

Contract trading can incorporate leverage. For example, if you are optimistic about a coin priced at 1 dollar and believe it will rise to 2 dollars soon, but you do not have enough capital.

(For example, if your total capital is only 1000 dollars, and the price doubles to 2 dollars, you will only earn 1000 dollars. Therefore, you can use the platform to borrow and add leverage for contract trading. If the opening price is 1 dollar (coin price) and you have 1000 dollars in margin with 100 times leverage (the platform lends you 100,000), your position value will be 100,000 dollars. When the coin price rises to 2 dollars, your position value becomes 200,000 dollars. After closing your position, you return the 100,000 dollars borrowed from the platform (leverage), and your profit will be 100,000 dollars. However, if the coin price drops by 1%, meaning it falls to 0.99 dollars, you will face liquidation. This is the allure of contract leverage, and the same applies to short positions.

The following are the basic concepts and processes of general contract trading:

Contract types: Choose the type of contract you are interested in. Common types of contracts include futures contracts, options contracts, and contracts for difference (CFD).

Each type of contract has its specific trading rules and characteristics.

Choose the contract subject: Select the underlying asset you wish to trade, ensuring you understand the asset's characteristics and market conditions.

Opening a position: Choose a suitable contract on the trading platform and decide whether to go long (buy the contract) or go short (sell the contract). Going long means you expect the asset price to rise, while going short indicates you expect the asset price to fall. Leverage trading: Contract trading typically supports leverage, meaning you can control a larger position with less capital. Leverage trading can amplify profits but also increases risk. Understand the platform's leverage ratio and risk management strategies, and use leverage cautiously. Profit and loss calculation: The profit and loss in contract trading are calculated based on the price movement of the underlying asset. If your long position (buying contracts) profits when the asset price rises, or your short position (selling contracts) profits when the asset price falls, you can make a profit. Conversely, if the price movement goes against your expectations, it may lead to losses. Closing positions: At the right time, you can choose to close your position, which means closing your contract position. When closing, you will buy (if it's a short position) or sell (if it's a long position) the same number of contracts to settle your position.

Like everyone else, I am thinking about how to choose good chips and seize opportunities in this bull market. Currently, I am quite optimistic about the Elon Musk concept coin, Marvin, and I welcome everyone to leave comments and discuss.

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