An overseas exchange menu lists several products - spot, perpetual futures, standard futures and more. For the same asset, the product determines how you hold it, what it costs, how much leverage applies and how much you can lose.
This guide compares spot with futures (especially perpetuals) in terms of money flow, cost and risk.
Spot: holding the asset itself
Spot trading buys the crypto asset with funds such as USDT and holds it in your account. What you bought is your asset and can be transferred to another wallet.
- Losses are limited to the amount paid (no further payment even if the price falls to zero)
- No leverage (some exchanges offer a separate margin product)
- Fees are a percentage of the traded amount (maker/taker)
Perpetual futures: trading the price difference with margin
A perpetual futures contract does not hold the asset. You post margin and trade the price moving up or down. There is no expiry, and you can open short positions as well as long ones.
| Item | Spot | Perpetual futures |
|---|---|---|
| What you hold | The asset itself | A position (contract) |
| Leverage | None | Several to several hundred times, by pair |
| Short selling | Not possible | Possible |
| Maximum loss | Up to the amount paid | Liquidation within the margin (isolated/cross differ) |
| Ongoing cost | None | Funding-rate payments |
To keep the perpetual price close to the spot price, a rate is exchanged between long and short holders at fixed intervals. Holding a position for a long time can mean paying continuously, depending on market conditions.
Which to start with
- You want to hold crypto for the long term → spot
- You want to trade short-term moves in both directions → futures (only once you understand liquidation)
- You want to get used to the interface first → small spot trades or a demo account
Futures positions are liquidated once margin falls below the maintenance level. Understand the leverage setting, margin mode (isolated/cross) and how the liquidation price is calculated, then start small.
Frequently asked questions
Q. What do USDT-M and Coin-M mean?
A. They describe the currency used for margin and profit-and-loss. USDT-M (USDT-margined) uses USDT as margin and settles P&L in USDT. Coin-M (coin-margined) uses the crypto asset itself, such as BTC, as margin. USDT-M is generally easier for beginners to track.
Q. Do spot trades have fees too?
A. Yes. Maker and taker rates apply to the traded amount. Some exchanges set the spot maker fee at 0%. Check the official fee page of each exchange.
Q. Can futures losses exceed my balance?
A. Most overseas exchanges liquidate positions once margin falls below the maintenance level and use an insurance fund to prevent negative balances. Treatment during extreme moves depends on the exchange's rules, so check the liquidation rules before trading.
Sources and conditions
FX Textbook is an independent information site, not an exchange or a provider of personal investment advice. Crypto-asset trading involves risk: price moves, liquidation of leveraged positions, transfer errors and exchange operating risk can result in the loss of some or all invested capital.
NEXT STEP
Once you know the mechanics, compare the exchanges.
Spot and futures fees, maximum leverage, liquidation rules and Japanese-language support, organised exchange by exchange.
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