Newbies in the crypto world must read: How to play with Spot, Spot Margin, and Futures?

Just entered the crypto world? Confused by Spot, leverage, and futures? There are actually 3 types of play; once you understand this article, you'll be a beginner.

Spot Trading: The Most Straightforward Buying and Selling

Simple and straightforward - if you have money and you are interested in a certain coin, just buy it directly, and the coin goes into your wallet. This is Spot.

• What you buy is real coins, not contracts.
• No leverage, buy as much as you spend.
• The risk is the lowest, but the returns are also limited.

For example: buying BTC with 100 USDT, the coin will be credited in 10 seconds.

Spot Leverage: Borrowing Money to Increase Bets

The platform lends you money, allowing you to amplify your operations. For example, if you only have 10 USDT but borrow 90 USDT, you can buy coins with the strength of 100 USDT.

Core Conditions:

• Need collateral (your other coins as guarantee)
• Interest is collected as usual, calculated hourly.
• Once the collateral is insufficient, the system will automatically sell your coins to pay off the debt (liquidation)
• Up to 10x leverage

Who is it suitable for: Short-term operators with risk tolerance.

Futures Trading: The Most Mind-Boggling but the Most Varied Gameplay

Don't buy coins, what you're buying is a contract - an agreement to buy and sell at a certain price at a future date.

Two Ways to Play:

1. Contract for Difference (with expiration date)

   • There are expirations daily to quarterly
   • Must close positions or deliver at expiration
   • Leverage 25-125 times (depending on the coin type)

2. Perpetual Contract (no expiration date)

   • Hold as long as you want.
   • But you need to pay the funding rate regularly.
   • Theoretically unlimited positions

Advantages of Futures:

• Can short (can also profit from bearish)
• Use small amounts to control large positions (open a 100 USDT position with 10 USDT)
• Short-term fluctuations can easily lead to huge profits, but also to huge losses.

Risk Warning: The higher the leverage, the easier it is to be liquidated. With a principal of 100 USDT, if the market goes against you in one direction, it can explode in seconds.

Quick Comparison

Advice for Beginners

0 Basics → Start with Spot trading, practice with 1000-5000 USDT, and understand candlestick charts and fundamentals.

Experienced → Try spot leverage with small funds to feel the risks and returns.

Daring and Resourceful → Futures are amplifiers; while you can earn 10 times, you can also lose 10 times. If you don’t have a few years of experience, don’t touch 125 times.

Core Advice: Never go all-in, do not gamble at emotional peaks, risk management is more important than choosing coins.