Spot trading explained: real coins without leverage and no liquidation price

Spot trading means you buy a cryptocurrency at the current market price, pay immediately and have the coin credited to your account straight away. There is no contract for a later date and no borrowed money. If the price falls, the value of your holding drops, but nobody forcibly closes your position. That is precisely what separates spot trading from futures, perpetuals and margin trading, and it is why beginners should almost always start here.

Friday morning showed how big the difference is in practice. On November 13, bitcoin traded at around $69,200 on the OKX exchange, just over 6 percent below the previous day's level. In the euro pair, the price was about 62,550 euros. Anyone who bought their coins on the spot market sees a paper loss and can wait. Anyone who placed the same bet with 20x leverage will, as a rule, already have lost their position in a pullback like this. This explainer shows you how the spot market works, how it differs from futures products and what that means for custody.

What is spot trading? Buying at the current price with immediate delivery

The spot market, also called the cash market, is the market for immediate exchange: goods for money, at today's price. The spot price is the price at which a coin actually changes hands at that moment. With shares, two banking days pass between purchase and delivery. At a crypto exchange, by contrast, the system books the trade within seconds, because buyers and sellers hold their balances on the same platform.

Trading takes place in trading pairs. A trading pair names first the coin you are buying and then the currency you pay with. BTC/EUR means bitcoin against the euro. BTC/USDT means bitcoin against the stablecoin Tether, which is pegged to the US dollar. For retail investors in the eurozone, the euro pair is usually the direct route, because deposits are made in euros by SEPA transfer and no detour via a stablecoin is needed.

What you own after a spot purchase

After the purchase, the exchange holds the coin for you. Legally, you have a claim to exactly that amount of bitcoin, and you can have it withdrawn to your own wallet. That is the delivery that defines the spot market. With a futures contract, by contrast, you only receive a promise of a cash settlement when the price moves. This is why you can do things with spot coins that are impossible with a derivative: put them in a hardware wallet, send them to someone else or use them for staking.

Order book, spread and order types: how the spot price is formed

Every centralised exchange keeps an order book for each trading pair. The order book is the list of all open buy and sell orders with price and quantity. At the top of the buy side sits the highest bid, at the top of the sell side the lowest ask. The gap between the two is called the spread. It is a hidden fee, because anyone buying immediately pays the ask and anyone selling immediately only receives the bid.

The same Friday morning showed how much the spread depends on the trading pair. In the liquid BTC/USDT pair, bid and ask on OKX were only 10 cents apart, at around $69,163. In the BTC/EUR pair, the best offer stood at 62,500.10 euros, but the last traded price was 62,549.80 euros. In a thin order book, the price can easily jump by a few tenths of a percent when a larger order comes in. For a 50-euro savings instalment, that barely matters; for a purchase of several thousand euros, it does.

Market orders, limit orders and slippage

With a market order, you buy immediately at the best available price. If the quantity at the top level of the order book is not enough, the rest is filled at worse prices. The difference between the expected and the actual average price is called slippage. A limit order, by contrast, sets a maximum price. It is only executed if someone sells at that price or lower, and can therefore remain unfilled.

Order types also determine the fee. If you add liquidity to the book with a limit order, you are a maker and pay less at many exchanges. If you take liquidity away with a market order, you are a taker. Broker apps often bypass the order book and quote you a fixed purchase price that already includes their markup. Which providers are cheap and what spreads they charge is shown in our crypto exchange comparison.

Spot versus futures: delivery today or a contract for a later date

A future is a forward contract: two parties agree today on a price for a bitcoin that is only settled on a fixed expiry date. With most crypto futures, only the difference between the agreed price and the price on the expiry date is settled in cash, and no coin ever changes hands. You are therefore trading a view on the future price without owning the underlying asset. Our article on bitcoin futures explains how such contracts are structured on regulated futures exchanges.

The price of a future deviates from the spot price. This difference is called the basis. If the futures price is above the spot price, this is known as contango. On Friday morning, OKX's bitcoin future expiring on March 26, 2027 cost around $70,690, while the index of spot markets stood at about $69,070. The premium of 2.3 percent corresponds to roughly 6.4 percent annualised. It mainly reflects the cost of capital: anyone who pays for the coin later avoids tying up their money until the expiry date.

Perpetual futures and the funding rate: futures contracts with no expiry date

The most heavily traded crypto derivatives have no expiry date at all. A perpetual future, or perp for short, is a futures contract that can remain open indefinitely. To keep its price close to the spot price nonetheless, buyers and sellers pay each other a balancing payment at fixed intervals, the funding rate. If the perp trades above the spot price, long positions pay short positions; in the opposite case, the reverse applies.

On OKX, the funding rate for the bitcoin perp against USDT stood at 0.0085 percent per eight-hour period on Friday morning. That sounds small. If the rate stayed at this level for a year, with three settlements a day, a long holder would transfer around 9.3 percent to the other side. This ongoing fee does not exist in spot: if you own a coin, you pay nobody anything for keeping it.

Tight limits apply to retail clients in the EU for such products. Many perps are legally classified as financial instruments, to which the rules of the MiFID II directive apply rather than the MiCA crypto regulation. We have described in detail what that means for permitted leverage in our analysis of perpetual futures and the CFD rules.

Margin trading and leverage: borrowed money turns a purchase into a loan

In margin trading, you buy more than your own capital allows. The exchange lends you the rest, and your balance serves as collateral, the margin. Leverage describes the ratio between the position size and the equity committed. With 1,000 euros of margin and 5x leverage, you control a position of 5,000 euros. You pay interest on the borrowed money, which many exchanges calculate hourly.

Margin trading can also exist on the spot market. You then buy real coins, but on credit, and the exchange reserves the right to sell them as soon as your collateral is no longer sufficient. That means you lose the most important advantage of pure spot trading: the freedom to sit out a decline. The link between leverage, collateral and forced selling is a matter of simple arithmetic, as the following sections show.

Liquidation and margin calls

Liquidation is the forced sale of a leveraged position by the exchange. The exchange triggers it when losses have eaten up the posted margin down to a minimum amount, the so-called maintenance margin. The exchange then closes the position before the borrowed money is at risk. In Germany, a 2017 general ruling by the financial regulator BaFin prohibits selling contracts for difference (CFDs) to retail clients with an obligation to make additional payments. With such a product, you can therefore lose at most your stake, but that stake disappears quickly in a pullback.

Liquidation in a sell-off: what a 6 percent drop means for spot and leverage

Friday morning's decline works as a worked example. Bitcoin fell within 24 hours from around $73,760 to about $69,160, a drop of just over 6.2 percent. The table shows what this move does to a long position with 1,000 euros of equity. Fees, interest and funding are not included, so real losses would be somewhat larger.

Position	Position size	Change in equity	What happens to the position
Spot, no leverage	1,000 euros	about minus 62 euros	stays open, you decide
3x leverage	3,000 euros	about minus 186 euros	stays open, buffer shrinks
5x leverage	5,000 euros	about minus 310 euros	stays open, almost a third gone
10x leverage	10,000 euros	about minus 620 euros	close to liquidation
20x leverage	20,000 euros	total loss	liquidated at a drop of only about 5 percent

With 20x leverage, the margin covers only 5 percent of the position. A decline of that size is enough, and because of the maintenance margin the exchange steps in even a little earlier. Where the threshold lies for your own position depends on your exchange's maintenance margin and can be calculated before you buy. For the spot holder, on the other hand, November 13 is a bad day and nothing more. Whether they sell, buy more or wait is their own decision, not that of an exchange's risk engine.

That does not mean spot trading is risk-free. A coin can lose 80 percent of its value even without leverage, and with small cryptocurrencies a total loss is possible. The difference lies in time: without leverage you have it; with leverage, a single hour often decides.

Spot exchanges in Germany and the EU: MiCA licence, custody and withdrawal

Under the MiCA crypto regulation, anyone who exchanges crypto-assets for euros or holds them for clients in the EU needs authorisation as a crypto-asset service provider (CASP). The longest transitional period the regulation allowed member states expired on July 1, 2026. Since then, a provider without authorisation may no longer offer spot purchases to clients in Germany. You can check whether an exchange is authorised in the public register of the EU securities regulator ESMA. The licence comes with obligations covering custody, capital and client information.

The licence also governs custody. An authorised exchange must keep its clients' coins separate from its own assets. Even so, at an exchange you only hold a claim against the provider and no key of your own. If you want to hold your spot coins for longer, you can withdraw them to your own wallet. That is not possible with derivatives, because there is no coin that could be withdrawn.

Buying spot via a broker, an exchange or an ETP

Besides exchanges, broker apps and neobanks offer spot purchases, usually at a fixed price rather than via an order book. A third option is exchange-traded products (ETPs) on bitcoin, which you buy through a securities account. Legally, an ETP is a debt security. If you want real coins with the right to withdraw them, a direct spot purchase on an authorised exchange brings you closest to the underlying asset.

Who spot trading suits: savings plans, one-off purchases and long holding periods

Spot trading suits anyone who wants to own a coin rather than just bet on its price. A savings plan buys a fixed amount at fixed intervals and so smooths the entry price. A one-off purchase with a limit order makes sense if you have a specific price in mind.

Derivatives have their place, for example to hedge an existing holding against price losses without selling it. For building wealth, however, they are a tool with a built-in clock: funding, interest and the liquidation threshold work against the position every day. If you want to trade with leverage, do so with a small, clearly limited share of your capital and keep your spot holdings separate.

Spot trading: without leverage there is no liquidation price

1. Choose an authorised exchange. Check MiCA authorisation before your first deposit and compare spreads and fees in the comparison of regulated crypto exchanges.
2. Keep spot and derivatives separate. If you want to use leveraged products, do so with a clearly regulated provider and only with an amount you can afford to lose. The crypto broker comparison gives an overview.
3. Document every purchase. Record the date, quantity and price of every spot order so that your holding periods can be traced. The programs in the crypto tax tool comparison help with this.

(As of November 13, 2026. This article is not investment advice. Prices and fee structures change; check the terms with the provider before you buy.)