Spot & Futures 101 · Chapter 3
Spot vs futures
Both markets track the same asset and their charts look almost identical. What differs is everything around the price: what you hold, what can be taken from you, and what it costs to keep the position open.
What you own
Spot gives you the asset. It sits in your balance, you can withdraw it to self-custody, and no exchange mechanism can remove it from you. Futures give you a contract — a claim on the price difference, settled in cash or coin, that lives and dies inside the exchange. There is nothing to withdraw.
Leverage and the risk that comes with it
Unleveraged spot is a 1x position: a 50% drawdown is a 50% drawdown, painful but survivable, and the position is still there when the market recovers. A futures position is margined, so the same 50% move at 10x wiped you out long before it finished — and being right afterwards does not bring the position back.
This is the single biggest practical difference. Spot risk is about price. Futures risk is about price and path: even a correct call can be liquidated by a wick on the way there.
What it costs to hold
Spot costs you the trading fee, once in and once out. After that, holding is free. A perp charges fees too, but it also charges funding every few hours for as long as the position is open. At a fairly ordinary 0.01% per 8h that is roughly 11% a year — a real drag on a long-held position, and a real yield if you happen to be on the receiving side.
What futures give you that spot cannot
Three things, mainly. Shorting — clean downside exposure without borrowing coins from anyone. Capital efficiency — the same exposure with a fraction of the capital posted, leaving the rest elsewhere. And hedging — a short perp against coins you intend to keep neutralises price risk without selling and without triggering a taxable disposal in many jurisdictions.
A useful rule of thumb: spot for exposure you want to keep, futures for exposure you want to manage. Long-term conviction belongs in an asset nobody can liquidate; tactical positioning, hedges and short views belong in a contract.
Reading them together
The two markets also inform each other. Spot volume rising while futures open interest is flat suggests real accumulation. Price grinding up on futures with a widening basis and heavy positive funding, while spot barely participates, suggests a leveraged move that has to pay for itself — and those unwind quickly, which is the subject of chapter 5.