Spot trading
Also called: spot · spot market · spot trade
Definition
Spot trading is buying or selling a cryptocurrency for immediate delivery at the current market price, so you actually own the coins once the trade is filled.
This entry is shown in English.
How Spot trading works
When you buy BTC with USDT on the spot market, the BTC lands in your exchange account right away. You can hold it, withdraw it to your own wallet or sell it later. The most you can lose is the money you spent, because there is no borrowing involved on a standard spot account.
This differs from derivatives such as perpetual futures, where you trade a contract that tracks the price, can use leverage, and can be liquidated. Spot is generally the first step for beginners because it is simpler and has no funding rates or liquidation.
Your costs in spot trading are the trading fee, the bid-ask spread and any slippage when you use market orders. Limit orders that rest on the order book are usually charged the lower maker fee. Exchanges also offer spot margin, which adds borrowing, but that is no longer plain spot risk.
Example
Suppose ETH trades at 2,400 USDT and you buy 0.5 ETH on spot with a market order. You pay 1,200 USDT plus a 0.1 percent taker fee of 1.20 USDT. If ETH rises to 2,640 USDT, a 10 percent move, your 0.5 ETH is worth 1,320 USDT. Selling with another 0.1 percent fee costs about 1.32 USDT, leaving about 117.48 USDT profit. If ETH fell 50 percent instead, you would still own 0.5 ETH and could not be liquidated.
Common mistakes
- Confusing the spot market with futures in the app and opening a leveraged position by accident.
- Using market orders on thinly traded pairs and losing a lot to slippage.
- Forgetting to include both buy and sell fees when calculating profit.
Learn and practise
FAQ
What is the difference between spot and futures trading?
In spot you own the coin. In futures you trade a contract on the coin's price, often with leverage, and your position can be liquidated.
Can you lose money in spot trading?
Yes, if the price falls below what you paid. But on a standard spot account you cannot lose more than you invested.
Can I withdraw coins bought on spot?
Yes. Coins bought on the spot market are yours to hold or withdraw, subject to the exchange's withdrawal rules and network fees.