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