Newbie Spot VS Future in simple language
Let's say :
A. You have $FDUSD only
B. You are investing in $BTC / $FDUSD pair
So, let's compare
Spot = FDUSD in spot wallet
Future = FDUSD in future wallet
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Spot = You can only BUY BTC
Future = You can BUY or SELL BTC
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Spot = Leverage is X1
Future = Leverage is optional from 1X up to 50X
example:
In 1X, price up/down of 0.01 FDUSD equals profit/loss of 0.01 FDUSD
In 10X, price up/down of 0.01 FDUSD equals profit/loss of 0.1 FDUSD
In 1X, price up/down of 19 FDUSD equals profit/loss of 19 FDUSD
In 20X, price up/down of 19 FDUSD equals profit/loss of 380 FDUSD
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Spot = you do not have to sell the BTC you bought.
Future = you make a contract to settle/close your position using the FDUSD in your future wallet. You will be liquidated when the price moves against your position, and the total of your loss is equals to all the FDUSD in your future wallet. Meaning you then have 0 FDUSD in your future wallet.
CMIIW and as always DYOR
