🪙 What Is Crypto Spot Trading?
In the spot market, you buy and sell cryptocurrencies like Bitcoin and Ethereum at the current market price, with immediate delivery.
This means you own the actual crypto asset and are entitled to associated benefits such as participating in forks, staking, or governance voting.
📃 What Is Crypto Contract (Futures) Trading?
Contract trading allows you to trade based on the price movement of cryptocurrencies without owning the underlying asset.
When you trade a BTC perpetual contract, for example, you’re entering an agreement that tracks BTC’s price—you don’t actually hold BTC.
🔍 Key Differences Between Spot and Contract Trading
Aspect | Spot Trading | Contract Trading |
Ownership | You own the crypto asset | No ownership; you trade a price-based contract |
Leverage | No leverage; full payment required | High leverage available (up to 100x) |
Trade Direction | Only profit from rising prices | Profit from both rising and falling prices |
Risk Mechanism | No liquidation risk | Subject to margin and forced liquidation |
Ideal Users | Beginners, long-term holders | Advanced traders, short-term strategists |
Use Cases | Buy & hold, transfer, staking | Fast trading, hedging, speculation |
Price Basis | Matches live market price | May differ due to funding rates & sentiment |
Liquidity | Relatively stable | Often higher trading volume and activity |
📌 What Is Contract Premium?
There’s often a difference between the spot price and contract price, known as the premium.
Positive premium: Contract price is higher than spot — market expects a price increase
Negative premium: Contract price is lower than spot — market expects a drop
Premiums fluctuate based on funding rates, leverage, and market sentiment.