Spot Trading vs Futures Trading – Simple Explanation

Many beginners on Binance see two options: Spot and Futures, but don’t know the difference.

Spot trading means you buy a cryptocurrency and own it directly.

If you buy Bitcoin on Spot, it belongs to you and stays in your wallet.

Futures trading means you are trading contracts, not the real coin.

You can profit from price going up or down, but the risk is higher.

Main differences:

• Spot = lower risk

• Futures = higher risk

• Spot is better for beginners

• Futures uses leverage, which can increase losses

If you are new to crypto, start with Spot trading until you fully understand the market.

Spot trading focuses on ownership and safety, while Futures trading focuses on speculation and risk.