How does futures trading differ from spot trading in the cryptocurrency industry?

1 answers

• Evans - Snaveware TechnologiesOct 12, 2020 · 5 years ago
  In the cryptocurrency industry, futures trading and spot trading serve different purposes. Spot trading is commonly used for buying and selling cryptocurrencies for immediate use or investment. It involves the actual transfer of cryptocurrencies between buyers and sellers. On the other hand, futures trading is more focused on speculation and hedging. It allows traders to enter into contracts to buy or sell cryptocurrencies at a predetermined price and date in the future. Futures trading offers the advantage of leverage, which can amplify potential profits or losses. It also provides the ability to hedge against price volatility by taking opposite positions in the futures market. However, it's important to note that futures trading carries higher risks and requires a deeper understanding of market dynamics. Traders should carefully consider their risk tolerance and investment goals before engaging in futures trading.
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