In the cryptocurrency market, spot trading and contract trading are two common methods of trading, with their main differences lying in trading methods and products.
Spot trading refers to buying or selling actual digital currencies, which means traders must directly hold or sell the digital currency. The price of spot trading is usually the real-time market price, and traders can trade at any time without an expiration date.
Contract trading refers to a derivative trading method in which traders can buy or sell the underlying digital currency at a specific price on the expiration date. Unlike spot trading, traders do not hold actual digital currencies, but rather trade on the price fluctuations of digital currencies.
In addition, contract trading usually offers more trading varieties and features such as leveraged trading, futures contracts, and options trading, which are not available in spot trading. Contract trading also provides more risk management tools, such as stop loss and take profit, which traders can use to limit their risks and protect their profits.
In summary, both spot trading and contract trading have their advantages and disadvantages, and traders can choose the appropriate trading method according to their investment goals and risk tolerance.
