Spot & Futures 101 · Chapter 1
What is the spot market?
The spot market is where an asset changes hands right now, at the current price. You send cash, you receive the coin; the trade settles on the spot, which is exactly where the name comes from. There is no expiry, no contract, no counterparty obligation left open afterwards — the transaction is finished the moment it fills.
That is the whole distinction from everything else in this section. In spot you end up holding the asset. In futures you end up holding a contract whose value tracks the asset. Two very different things that move together.
The order book
A spot price is not a number the exchange decides — it is the result of two queues of resting orders. On one side sit the bids: people willing to buy, at the price they are willing to pay. On the other sit the asks (or offers): people willing to sell, and their price. The book is sorted so the best bid and the best ask face each other in the middle.
The gap between them is the spread. If the best bid for BTC is $60,000 and the best ask is $60,010, the spread is $10 — the cost of crossing the book immediately. A trade only happens when someone accepts the other side's price, and the price of the last trade that filled is what you see quoted as "the price".
How much size is resting at each level is the market's depth. A deep book absorbs a large order with barely a wobble; a thin book lets the same order walk several levels up, which is what traders mean by slippage. This is the structure StrategyView renders in the market depth panels.
Makers and takers: an order that rests in the book adds liquidity — you are a maker. An order that immediately fills against a resting order removes it — you are a taker. Exchanges usually charge takers more, and sometimes pay makers a rebate.
Pairs and what you actually own
Spot always trades as a pair: BTC/USDT, ETH/BTC, BTC/EUR. The first asset is what you are buying or selling, the second is what you are paying with. Buying BTC/USDT means giving up USDT to receive BTC — the two legs happen at the same instant.
Once the trade settles, that BTC is a balance you control. You can withdraw it to your own wallet, hold it for years, or sell it back later. Nothing expires, nothing gets called away, and nobody can force you out of the position — the risk you carry is simply the price of the asset, one-for-one.
The corollary is just as important: your loss is bounded by what you put in. Spot without borrowing cannot go below zero, which is why every leverage concept in chapter 4 is a departure from this baseline, not an extension of it.
Why spot is the reference
Every derivative in this section — perpetuals, dated futures, options — ultimately points back at a spot price. Exchanges publish an index price built from several spot venues precisely so that a single exchange's book cannot be pushed around to trigger liquidations elsewhere. When you read about a perpetual trading "above spot", the spot in that sentence is this market.
Next: the contract that behaves like spot but never expires, and the two ways it can be collateralised.