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Difference Between Spot Trading and Futures Trading on Binance

Spot Trading and Futures Trading have fundamental differences in how they work and their risks. Both are equally popular on Binance, but have different purposes.

Spot Trading:

Asset Ownership: When you buy an asset in the spot market, you actually own that asset.

No Leverage: Trading in the spot market does not use leverage, so there is no risk of liquidation.

Profits are based solely on upward price changes over time.

However, if the price falls and you sell it, you will experience a loss, but if you buy for a long period of time and are sure it will rise again, you will make a profit.

Futures Trading Tips: try these steps 1-7 days you will get maximum profit

Futures Trading:

Future Price Speculation: You do not physically own the asset, just trade contracts based on the future price of the asset.

Leverage: You can trade with leverage, allowing for greater profits but also higher risks.

Short Positions Available: You can profit from falling markets through short positions.

Example:

Spot Trading: If you buy 1 BTC at $50,000, you have 1 $BTC If the price $BTC rises to $55,000, you make a profit of $5,000.

This is a spot graphic âŹ‡ïž

Futures Trading: You can trade $BTC /USDT contracts using leverage to maximize potential profits from these price movements.

This is the futures chartâŹ‡ïž

Example: You have a capital of 100$, then you trade a contract on one coin with a margin of 10% means you risk 10$ and with a leverage of 10x then you are the same as opening a capital of 100$ without using all your capital with a small risk. This is like you borrow capital to trade.