Spot Trading: The Basics Every Crypto Trader Should Know

Please note: This article does not constitute investment advice. Laws governing crypto, derivatives, and other forms of trading and investments—as well as taxation—vary by region and are subject to change. You are responsible for complying with the laws in your jurisdiction. Ouinex’s services and offers, including those mentioned in this article—if any—may vary by location and are subject to change. All investments carry risk.

Even if you’re new to crypto, you’ve probably heard the term “spot trading.”

It sounds simple, and it is: you buy and sell crypto. But knowing how it works (and when it’s the right time to trade) is essential if you want to trade smarter.

Here’s your no-fluff guide to spot trading in crypto, how spot crypto compares to other trading styles (such as trading crypto perpetuals), and how Ouinex gives you options beyond the basics.

Key Takeaways

Spot trading is the immediate purchase/sale of crypto at market price
It’s simple, transparent, and gives you direct ownership
No leverage/margin trading, but also less risk
No shorting (i.e. making money by predicting the price will go down)
Ouinex offers spot trading for crypto plus crypto and TradFi derivatives for advanced strategies

What Is Spot Trading?

Spot trading is when you buy or sell an asset, like Bitcoin (BTC) or Ethereum (ETH), for immediate delivery at the current market price.

You pay now. You get it now.

No leverage.* No contracts. No expiry dates. Just good old-fashioned ownership.

*Leverage, or margin trading, is when you invest a certain amount and the platform multiplies it by 2, 10, or even 200 or more. So you just put down collateral and then borrow from the platform to trade with more.

Example of a Spot Trade:

You buy 0.1 BTC at $50,000.
That BTC goes directly into your wallet.
If the price goes up, you win. If it drops… well, you’re holding the bag (for now).

That said, you can use automatic trading tools for spot crypto so you can sell off the asset before you lose money. Let’s talk about that next.

Limit Orders, Stop-Losses, and Automatic Trading Alerts

Limit orders are set up so that you can buy/sell at a certain price
Stop-losses are set up so that you sell off your crypto (or a portion of your crypto) in case the price goes down to a certain level so as to prevent losses
Automatic trading alerts are set up so that you get pinged when something specific happens on the market (you set the variables, for example, you get pinged if BTC goes up with a certain percentage, or both BTC and ETH go down)

For example, you might want to sell off 50% of your ETH if it reaches a certain price point to make a profit, and the other 50% if it goes up more. So you set up two limit orders.

On the other hand, you might want to buy BTC once it goes down to a certain price level, so you set up a buy order at that price.

Why People Love Spot Trading

Simplicity: Easy to understand, easy to execute
Ownership: You actually hold the asset, not just a contract
Lower Risk: No leverage means less chance of getting liquidated

It’s a great starting point for beginners, or a steady strategy for long-term holders. Just remember never to invest more than you can afford to lose, or set your stop losses so that you never lose more than you can afford. While you don't technically lose your crypto, if it goes down in value and you need to stay on top of your trading strategies to ensure you always have enough cash on hand.

What Spot Trading Doesn’t Offer

Spot trading has its limits:

No ability to short the market (i.e. profit when prices drop)
No leverage to amplify gains (or losses)
Slower capital movement as your funds are tied to the asset you bought

That’s why experienced traders often use derivatives,* like perpetual contracts or CFDs, to go long or short with more flexibility, or simply to hedge.**

Ouinex gives you both: spot trading for stability, and crypto perps and TradFi derivatives for strategy.

*Derivatives in the form of CFDs are contracts that let you predict whether an asset is going up or down in value. If your prediction comes true, you earn. For example, you might predict that BTC will go up in price and if it does, you earn. Derivatives are often traded with leverage.

**Hedging is a form of risk management. For example, if you’ve bought a lot of BTC and you intend to keep your BTC for many years to come, to ensure you don’t lose too much when the market goes down, you can short BTC and make money from it going down, while still holding onto the BTC you already own. You hope that in 10 years your BTC will have risen in value, but in the meantime when the market is going down, you’re making money off that, too.

Spot Trading on Ouinex

Ouinex allows you to do spot trading:

Trade popular cryptos like BTC, ETH, and more
Real-time price execution with visible spreads and slippage, plus slippage control
No-CLOB model for fairer pricing (no competing against institutions)

On other platforms you trade against market makers (big financial institutions) with millions at their disposal and trading tools that are so much faster than yours. Not only that, the CLOB model in crypto allows for spoofing, stop hunting, and front-running. Meaning the market is manipulated. Our model cuts out all of that. Read more about our no-CLOB execution model here.

In addition, we show you slippage and spreads in real-time as you trade, meaning there are no hidden costs.

FAQs: Spot Trading in Crypto

What’s the difference between spot trading and derivatives?
Spot = you own the asset. Derivatives = you’re trading a contract based on the asset’s price. For CFDs you predict whether the price of an asset will go up and down and make money if your predictions come true.

Can I use leverage in spot trading?
No. Spot trading is 1:1 as there are no borrowed funds involved.

Is spot trading safer than leveraged trading?
Generally, yes. You can’t get liquidated (i.e. lose your assets) in spot trading, but your asset value can still drop. For example, if you buy BTC when it reaches an all time high and keep it as it goes down in value, you still own the asset, it’s just worth less (but hopefully it will soon go up in value again, but no one can guarantee that).

Do I need to verify my account to trade spot crypto on Ouinex?
No, not for small amounts, you can do no KYC trading, but for larger sums you have to. It’s part of our regulatory compliance. But KYC is fast and secure.

What assets can I spot trade on Ouinex?
BTC, ETH, and other major cryptocurrencies, and we add more regularly. However, we vet all our tokens thoroughly, including new projects that you can find on Launchpad.