Spot, futures and CFDs explained
Owning a coin is very different from trading a contract on its price. Know which one you are doing.
Spot: you own the asset
Buying on a spot market means you own the coin. There is no leverage by default and no liquidation — but you are responsible for keeping it secure, and you can only profit when the price rises.
Futures and perpetuals
Futures are contracts on the future price of an asset. Perpetual futures have no expiry and use a periodic funding rate to keep their price close to spot — depending on market conditions, you either pay or receive funding while your position is open.
Futures allow leverage and short-selling, and if losses reach your margin the exchange can liquidate the position automatically.
CFDs
A contract for difference (CFD) lets you speculate on price through a broker or prop firm without owning any coins. Watch for overnight financing charges and wider spreads, and note that many prop firms offer only low leverage on crypto CFDs.
Educational content only — not financial, investment or trading advice. Trading forex, CFDs, crypto and other leveraged products carries a high risk of loss and may not be suitable for everyone. Past performance does not guarantee future results.