Derivatives / Futures | Spot
Derivatives / Leverage Exchanges / Derivative Instruments
What is it?
Leveraged futures contracts allow trading with much larger amounts than you have in your deposit, thereby increasing your potential profits... and losses.
Advantages:
Higher profit potential: Financial leverage enables multiplying the profits from smaller-value investments.
Hedging: An option to secure other investments or the entire portfolio against adverse market changes.
Risks:
Higher risk: Potential losses can exceed the initial investment – leverage works both ways.
Complexity: Leveraged futures contracts are not recommended for beginner traders due to their complicated mechanism.
Spot / Spot Exchanges
What is it?
Spot market - here, cryptocurrency transactions happen "right now". You buy or sell assets that are immediately delivered and settled.
Advantages:
Simplicity: An ideal solution for beginners – transactions are straightforward and transparent.
Speed: Your transactions are settled instantly.
Risks:
No leverage: You can't use financial leverage here, limiting the potential profit from a single transaction.
Volatility: High price volatility can lead to rapid changes in the value of your investment.
Updated on: 12/11/2023
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