Spot vs Futures vs Margin
Understand spot buying, futures contracts, leverage, liquidation, margin, hedging, and funding before you touch derivatives.
You know basic spot buying and want to understand why futures can be useful and dangerous.
Spot is ownership, futures are contracts
In spot markets, you buy the asset directly. If you buy ETH spot, you own ETH on the exchange. In futures, you trade a contract that tracks the asset price without owning the asset.
Futures allow hedging and funding strategies, but leverage can liquidate beginners quickly.
- Spot is simpler and safer for beginners.
- Futures can go long or short.
- Leverage magnifies both gains and losses.
- Liquidation happens when margin is no longer enough to support the position.
What funding means
Perpetual futures use funding payments to keep futures close to spot. Sometimes longs pay shorts; sometimes shorts pay longs.
Funding can become a strategy only when you hedge properly and monitor the rate. It is not free money.
- Positive funding often means longs pay shorts.
- Negative funding often means shorts pay longs.
- A spot plus opposite futures position can reduce directional exposure.
- Funding can flip after you enter.
How MyCoinWay fits
Funding Scanner helps you compare rates before opening a hedge or funding farm. Terminal context helps you avoid entering during unstable volatility.
- Use Funding Scanner before any futures-based strategy.
- Start with no leverage or very low leverage.
- Read Delta-Neutral Funding in Pro Hacks after this guide.
- I understand liquidation before using leverage.
- I can explain long, short, and hedge.
- I know funding can change.
- I will test with small size first.
Continue with context
Choose a useful next step
Use the guide to build a workflow: read the next concept, verify current public data, then compare exchange conditions before acting.