Beginner's Guide

Spot vs. Futures Trading

Understand the fundamental differences, risks, and opportunities of each trading type. Make informed decisions based on your risk tolerance and goals.

15 min read
Updated: January 2026

Spot Trading

Own Real Crypto

Buy and own actual cryptocurrency
No leverage = no liquidation risk
Hold forever, no expiration
Perfect for beginners and HODLers
Can withdraw to your own wallet
Risk Level
Low

Futures Trading

Trade with Leverage

Trade contracts, not actual crypto
Up to 125x leverage available
Profit from both rising and falling prices
Risk of liquidation (total loss)
Requires active management
Risk Level
High

Feature-by-Feature Comparison

FeatureSpot TradingFutures Trading
OwnershipYou own the actual cryptoYou trade contracts, not crypto
LeverageNo (1x only)Yes (up to 125x)
Profit DirectionOnly when price goes upBoth directions (long/short)
ExpirationNever expiresPerpetual or quarterly
Liquidation RiskNoneYes, can lose entire position
Funding FeesNoneEvery 8 hours
Best ForHODLing, beginnersTrading, hedging, pros

Interactive Leverage Simulator

See how leverage amplifies both gains AND losses. This is a live simulation.

Select Leverage:
Your Investment
$1000
BTC Price Change
+0.20%
Your P&L
+$19.55
(+1.95%)
-100% (Liquidation)Break Even+100%
Liquidation at -10% price move

With 10x leverage, a 10% move against your position will liquidate it completely.

Important Warning About Futures

70-90% of futures traders lose money. This is not a statistic to ignore. Leverage amplifies losses just as much as gains.

Common mistakes that lead to losses:

  • Using too much leverage (anything above 10x is extremely risky)
  • Not setting stop-losses
  • Trading without a clear strategy
  • Emotional trading after a loss
  • Not understanding funding rates

Our recommendation: If you're new to trading, stick with spot trading until you have at least 6-12 months of experience and consistent profits.

Frequently Asked Questions