In cryptocurrency trading, there are three types of trading methods: spot, leverage, and contracts, which differ fundamentally in asset ownership, sources of leverage, settlement mechanisms, and risk structures.

1. Spot Trading

- Core Logic: Instant buying and selling of actual assets

- Leverage and Risk:

- Leverage Ratio: 1x (no leverage)

- Maximum Loss: Principal goes to zero (when the coin price drops to 0)

- Typical Scenario:

> Using 1000 USDT to buy 0.025 BTC, if BTC rises to 45,000 USDT, profit is 125 USDT (25% increase).

2. Margin Trading

- Core Logic: Using spot collateral to borrow and amplify principal

- Leverage and Risk:

- Leverage Ratio: 2-100x (platform set limit)

- Liquidation Mechanism: When the value of the collateral asset ≤ borrowed principal + interest, automatic liquidation is triggered.

- Maximum Loss: May exceed principal (risk of liquidation is low, but must cover the borrowing gap).