Spot trading

How it is used

Exchanges separate the spot market and spot wallet from futures and margin trading. Without leverage, the most you can lose in spot trading is the amount you paid, while a small price move can wipe out a highly leveraged position. News reports also mention spot bitcoin ETFs, which hold real bitcoin.

Example sentences

1. I only do spot trading; I'm not comfortable with futures.

2. Spot trading volume fell this month, while futures volume kept rising.

Common collocations

• spot market
• spot price
• spot wallet
• spot trading volume
• spot trading fees

Related terms

• leverageThe use of borrowed funds to open a trading position larger than your own money. It is shown as a ratio such as 10x and makes both gains and losses bigger.
• order bookA live list of all open buy and sell orders for a trading pair, sorted by price. It shows what buyers will pay, what sellers want and how much is available at each price level.
• trading pairTwo assets that can be traded directly against each other on an exchange, such as ETH/BTC. The price shows how much of the second asset you need for one unit of the first.
• exchangeA platform where people buy, sell and swap cryptocurrencies, either for other crypto or for traditional money. Some are run by a company, and some work entirely through smart contracts.
• centralized exchangeA crypto exchange run by a company that holds customers' funds, matches buy and sell orders on its own system and usually checks users' identities. Often shortened to CEX.

More terms: Exchanges & Trading

• market cap
• volatility
• fiat
• liquidity
• liquidation
• slippage