Spot vs Futures vs Perpetuals: Leverage and Liquidation Explained
In short
- Spot = you own the real coin; you can just wait
- Futures = a bet on direction; you can go Long or Short
- Leverage multiplies wins AND losses
- Perpetuals never expire; funding is paid every 8 hours
- Beginners: start with spot, then 2–3x leverage max with a stop-loss
There are two main ways to trade: Spot and Futures. Let's go slowly.
Spot
- You buy the real coin
- It’s yours to keep or send
- Price falls? You can just wait
- You can’t lose more than you put in
Futures
- A bet on up or down
- You don’t own the coin
- Uses leverage
- Can be wiped out (liquidated)
This is the Spot page. Spot means you buy the real coin — buy 0.01 BTC and you own 0.01 BTC.
The chart shows how price moved. Each candle is one time period — green closed higher, red closed lower.
The order book: red rows are people selling and their prices, green rows are people buying. The live price is where they meet.
Market order = buy right now at the current price.
Limit order = only buy if the price drops to my number — it waits until then.
Type how much USDT to spend and tap Buy BTC. If BTC rises 10%, your coins are worth 10% more. If it falls, you can simply hold and wait.
Now Futures. Here you don't buy the coin — you open a contract that wins or loses depending on where the price goes.
Long = you think the price will go up.
Short = you think it will go down.
In futures you can make money in both directions — and lose in both too.
Leverage multiplies your position. With 10x, $10 controls $100 of Bitcoin. Sounds great — but losses are multiplied by 10 as well.
This is the scary part: the liquidation price. If the price reaches it, the exchange closes your trade and your money in that trade is gone.
Example: $100 at 10x leverage
- Bitcoin up 5%: +$50 (+50%)
- Bitcoin down 5%: −$50 (−50%)
- Bitcoin down 10%: −$100 — liquidated, all gone
Most crypto futures are perpetuals ("perps") — they never expire, so you can hold them as long as you like. To keep their price close to the real price, traders pay each other a small funding fee every 8 hours.
Spot
- Own the coin
- No expiry
- No funding fees
Perpetual
- Contract, no expiry
- Leverage
- Funding every 8h
Dated futures
- Contract with an end date
- Leverage
- Settles on that date
People also trade at different speeds. Find the style that fits your life:
Trading styles
- Scalping — seconds to minutes; very stressful, not for beginners.
- Day trading — closed the same day; needs hours of screen time.
- Swing trading — days to weeks; suits people with a job.
- Long-term holding — months to years; the easiest start, spot only.
And the rule that saves beginners the most money:
Beginner rule
Start with SPOT. If you try futures: tiny amounts, 2–3x leverage at most, and always set a stop-loss before you enter. Most beginners who lose money lose it on high-leverage futures.
With 20x leverage, roughly how far must the price move against you to wipe out your trade?
Answer: About 5%. 100% ÷ 20 = 5%. A normal daily move can do that.
Practise this lesson interactively in Nunno Academy. More guides: Learn crypto.
Educational content, not financial advice.