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.