Spot vs Futures Trading โ๏ธ
Spot Trading ๐
- You own the asset immediately after purchase
- There is a document or record in the wallet/depot โ proof of ownership ๐๏ธ
- You can use the asset: wear, eat, rent, transfer โก๏ธ
- Long/short in spot:
- Long: bought for $100 โ sold for $130 โ +$30 ๐
- Short: sold short for $100 โ bought for $80 โ +$20 ๐
Futures Trading โณ
- You do not own the asset, but trade a contract
- A contract is an obligation to buy/sell the asset in the future at a price ๐
- You can immediately go long (on the rise) or short (on the fall)
- Examples:
- Short futures on oil at $100 โ price falls to $80 โ profit $20 โ๏ธ
- Long futures on gold at $1500 โ price rises to $1600 โ profit $100 โ๏ธ
Key Differences:
Parameter:
- Spot ๐
- Ownership: Yes
- Proof: Wallet, report
- Usage: Can spend, transfer
- Long/short: Through the asset
- Futures โณ
- Ownership: No, only contract
- Proof: Digital/paper contract
- Usage: Only speculation
- Long/short: Directly through the contract
#Spot #futures #long #short #TradeToWin
