Spot Trading:

In the spot market, you buy and sell digital currency with instant delivery, and you own the corresponding cryptocurrency immediately after the order is filled.

Contract transaction:

In the contract market, a position obtained after opening a position is a contract representing the value of a specific cryptocurrency. When the contract is opened, you do not own the underlying cryptocurrency. What you have is a contract that you agree to buy or sell a specific cryptocurrency at some point in the future.

Example: If you buy BTC with USDT in the spot, then BTC will be displayed in the asset list in the currency account, which means that you already hold the corresponding BTC;

In the contract, if you open a long BTC position with USDT, the corresponding BTC asset will not be displayed in the contract account. The contract account only has USDT assets, and the position displayed in the open position means that you have the right to sell the BTC in the future. gain or lose. Your profit or loss is the amount of USDT.

· Leverage

Leverage makes contract trading extremely capital efficient. When doing contract trading, you only need to invest a fraction of the market value of 1BTC to open a contract position of 1 BTC. In contrast, spot trading does not offer leverage. For example, the current market price of 1BTC=30000USDT, if you want to buy 1 BTC in the spot market, you need to spend 30000USDT to get 1BTC, and in the contract market, if you open 100 times leverage, you need to pledge 300USDT to get 1BTC long position ownership.

· Flexibility to choose long or short positions

If you hold USDT in the spot, all you can do is to buy the currency. When the market continues to fall, buying the currency is not profitable;

However, in the contract, if you hold USDT, you can choose to go long and short according to the market conditions. When the market continues to fall, you can choose to short to make a profit, and when the market continues to rise, you can choose to go long and make a profit.