Advanced8 min read
Spot vs Futures Trading
Compare spot and futures markets, leverage mechanics, liquidation risk, and safer participation rules.
futuresleverageperpetuals
Spot market
- You buy and own the asset directly.
- No liquidation risk unless you borrow on margin.
Futures market
- You trade exposure through contracts with leverage options.
- Funding rates and liquidation mechanics materially impact outcomes.
Risk protocol
- Use lower leverage than your maximum available.
- Keep emergency collateral and hard risk limits.
- Do not hold oversized leveraged positions through major news events.