Both spot trading and futures trading allow you to participate in digital asset price movements, but the objects traded are different: spot trading involves buying or selling an asset; futures trading involves establishing a position related to the price of the underlying asset.
What is spot trading?
Spot trading involves directly buying or selling digital assets. For example, you use USDT to buy BTC. After the order is filled, you hold the BTC you purchased. If the price of BTC subsequently rises or falls, the market value of the BTC you hold changes accordingly.
Buying spot assets itself does not require futures margin, and you will not be liquidated due to insufficient maintenance margin for a futures position; however, the asset price may still fall significantly.
What is futures trading?
Futures trading involves using margin to establish a position related to the price of the underlying asset. If you expect the price to rise, you can go long; if you expect the price to fall, you can go short. For example, establishing a long BTC futures position does not mean that you have purchased and hold spot BTC as a result.
Futures can be traded using leverage, allowing you to establish a position with a greater value using a relatively smaller amount of margin. Leverage magnifies the profit or loss from price movements relative to the margin; if the margin status reaches the liquidation conditions, the position may be forcibly liquidated.
Key differences
| Comparison item | Spot trading | Futures trading |
| Object traded | Actual digital assets | Contracts related to the price of the underlying asset |
| What you hold after the trade is filled | The asset purchased | A futures position; opening a position does not result in holding the underlying asset |
| How to participate in price declines | When simply buying and holding spot assets, a price decline reduces the asset's value | You can establish a short position and may profit when the price falls |
| Margin and leverage | Ordinary spot trading uses your own assets and does not involve futures margin | Uses margin, with applicable leverage available for selection |
| Fees during the holding period | Trading fees are charged according to the spot trading fee rates | Trading fees are charged according to the futures rules; perpetual futures may also involve paying or receiving funding fees |
| Liquidation risk | Simply buying spot assets will not result in liquidation due to insufficient futures margin | Insufficient margin may trigger liquidation |
Example: How do the results differ when the same amount of funds is invested?
Assume that the price of BTC is 100,000 USDT, and Xiao Li and Xiao Wang each invest 10,000 USDT. Both expect BTC to rise:
- Xiao Li buys spot BTC: using 10,000 USDT to buy 0.1 BTC.
- Xiao Wang trades futures: using 10,000 USDT as margin and, assuming 5x leverage, establishing a long position worth 50,000 USDT, equivalent to 0.5 BTC.
Excluding trading fees, funding fees, slippage and liquidation for now, if the price of BTC changes:
| BTC price | Xiao Li: Change in the value of spot assets | Xiao Wang: Illustrative profit or loss from the futures position |
| Rises to 110,000 USDT (+10%) | +1,000 USDT | +5,000 USDT |
| Falls to 90,000 USDT (−10%) | −1,000 USDT | −5,000 USDT |
Xiao Li still holds 0.1 BTC, and its value in USDT changes with the price of BTC. Xiao Wang does not hold BTC as a result of opening the position, but the futures position has greater exposure to price movements, so the same percentage change results in a larger illustrative profit or loss.
Note: Xiao Wang's actual position may have already been liquidated due to insufficient maintenance margin before the price falls to 90,000 USDT. The table is only used to illustrate how leverage magnifies profits and losses; it cannot be used to calculate the liquidation price or final loss.
What should you pay attention to before trading?
If you want to directly buy and hold digital assets, you should first understand the execution of spot trades and the risks associated with the assets. If you want to participate in price movements through long or short positions, you should first understand the leverage, margin, fees and liquidation rules for futures. Being able to go short does not mean you will necessarily profit, and using leverage also magnifies losses.
Disclaimer
This article is provided for product information and educational reference only. It does not constitute investment, trading, financial or legal advice, nor does it constitute an offer to buy or sell any digital assets. The examples in this article are illustrative and do not take into account factors such as trading fees and funding fees. Actual results may differ.
Product features, trading rules, fee rates and page information may be adjusted. If this article differs from the latest announcements from AstralX or the information displayed on the trading page, the applicable latest rules and the actual page information shall prevail.
Digital asset futures trading involves a high level of risk. Leverage magnifies the impact of price fluctuations on margin, and you may lose all of the margin you invest. Before trading, make sure you fully understand the product rules and make prudent decisions based on your financial situation and risk tolerance.