Spot Trading

Leverex exchanges are the best way to buy, sell, and trade cryptocurrency assets like BTC and ETH. As a crypto trader, you must be familiar with the concept of Spot Trading. But even if you are not, learning different crypto concepts and trading strategies is a lifelong process. That is why we have decided to help you familiarize yourself with the concept of Spot Trading.

What is the crypto spot market?

A Spot Market is a market where you can trade assets with other traders in real-time. As the name suggests, transactions are settled immediately or "on the spot" as soon as the buying/selling order is filled. As a buyer, you can purchase an asset with fiat or another cryptocurrency from a seller. More often than not, the delivery of the is immediate. But sometimes, it also depends on the asset being traded.

Spot markets exist in different forms like third-party exchanges and over-the-counter (OTC) trades.Third-party exchanges act as an intermediary between buyers and sellers, whereas OTC trades occur between buyers and sellers without an intermediary.

Let's try to understand the concept behind spot trading using the following scenario:

A buyer enters the market with a specific buy price. This is the maximum amount they wish to spend to buy a particular asset. For example, trader A wants to buy 1000 USDT at $0.99 equivalent of BTC each.

Once trader A is matched with trader B looking to sell 1000 USDT at $0.99 equivalent of BTC each, the order is executed and filled immediately. Similarly, sellers can also enter the market with a specific ask or sell price.

Spot traders try to make profits in the market by purchasing assets and hoping they'll rise in value. They can sell their assets later on the spot market for a profit when the price increases. Spot traders can also short the market. ... The current market price of an asset is known as the spot price Rypto spot trading is a transaction between buyers and sellers to trade one cryptocurrency for another at the current market price. Taking BTC/USDT as an example, the price of the trading pair represents how many units of USDT need to be paid to buy 1 BTC, or how many units of USDT can be obtained by selling 1 BTC
Formula for Spot: Trading Fee = Filled Order Quantity x Trading Fee Rate. Taking BTC/USDT as an example: If the current price of BTC is $40,000. Traders can buy or sell 0.5 BTC with 20,000 USDT. Trader A buys 0.5 BTC using a Market Order with USDT.
Steps to trading spot markets
  1. Understand spot trading.
  2. Learn why people trade spot (cash) markets.
  3. Pick a spot market to trade.
  4. Create a trading account and log in.
  5. Find your spot trading opportunity.
  6. Decide whether to go long or short.
  7. Set your stops/limits and place your trade.
  8. Monitor and close your position
A spot trade, also known as a spot transaction, refers to the purchase or sale of a foreign currency, financial instrument, or commodity for instant delivery on a specified spot date.
The spot price of a commodity is the current cash cost of it for immediate purchase and delivery.
The futures price locks in the cost of the commodity that will be delivered at some point other than the present—usually, some months hence.