Spot trading means buying and selling assets at the current market price, also known as the “spot price.” In spot trading, you cannot use leverage, which means your profit or loss depends only on the amount you invest.

Example of Spot Trading:

Let’s say the price of 1 Bitcoin is $20,000.
If you want to buy it in spot trading, you’ll need the full $20,000 in your wallet.

Now, if Bitcoin’s price increases to $21,000, you make a $1,000 profit.
But remember — you invested the full $20K. There’s no borrowing or margin involved.

Spot Trading vs CFD (Leverage) Trading

In CFD (Contract for Difference) or Margin trading, you trade using leverage, meaning you can open larger trades with a smaller deposit.

Example of CFD Trading:

Let’s say you have just $200, and the broker offers 1:100 leverage.
With that, you can trade 1 Bitcoin worth $20,000 — just like in spot trading.

If the price goes from $20,000 to $21,000, you still make $1,000 profit — but you only invested $200!

Leverage = High Risk & High Reward

Leverage can boost your profits if the market moves in your favor.
But it can also increase losses quickly if the price goes against you. Always use leverage with caution and risk management.

✅ Conclusion

• Spot trading = No leverage, safer, but needs full investment.
• CFD/Margin trading = Uses leverage, lower investment, higher risk & reward.

Choose what fits your style, and never forget: Higher risk doesn’t always mean higher returns.