# 1. Spot Trading#
Description: Buy/sell currencies directly at the current price ("instant").
Features on Binance:
- Advantages:
- Simplicity and convenience for beginners.
- True ownership of currencies (can be withdrawn to your wallet).
- Support for thousands of trading pairs (like BTC/USDT, ETH/BUSD).
- Fees: Commission starting from 0.1% (may decrease using BNB token or based on trading volume).
- Risks: Limited (you cannot lose more than you invested).
### 2. Futures Trading
- Description: Trading futures contracts to buy/sell an asset at a specified price on a later date, without actually owning the asset.
- Features on Binance:
- Types of Contracts:
- Perpetual Contracts: No expiration date (most common).
- Quarterly Contracts: Expire every 3 months.
- Leverage: Up to 125x (high risk!).
- Pricing: Based on the index price to prevent manipulation.
- Fees: Commission starting from 0.02% (for Maker) and 0.04% (for Taker).
- Risks: Very high (losses can exceed capital due to leverage).
### 3. Margin Trading
- Description: Borrowing funds to increase your position size, using your assets as collateral.
- Features on Binance:
- Leverage: Up to 10x (depending on the pair).
- Account Types:
- Isolated: Margin is isolated for each position.
- Cross: Margin is shared between positions.
- Interest: Applied to borrowed amounts (variable rates).
- Liquidation: Occurs if the value of the collateral drops below a certain threshold.
- Risks: Medium to high (potential for losses, liquidation risk).
### 4. Borrowing and Lending (Crypto Loans & Lending)
- Description:
- Borrowing: Using your assets as collateral to borrow other currencies.
- Lending: Deposit your assets to earn interest (like Binance Earn).
- Features on Binance :
- Loan-to-Value Ratio (LTV): Usually 50-70% (e.g., $1000 collateral allows borrowing $500).
- Interest: Predefined (for borrowing) or flexible (for lending).
- Risks:
- For the lender: Low (as long as the platform is secure).
- For the borrower: Risk of collateral liquidation if its value decreases.
### 5. Funding Rate - Specific to Futures
- Description:
Periodic payments between buyers and sellers in perpetual contracts to maintain market balance.
- Features on Binance:
- Account: Every 8 hours (00:00, 08:00, 16:00 UTC).
- Impact: If the market is bullish, buyers push sellers (and vice versa).