Spot Trading
The spot market is where cryptocurrencies like Bitcoin, LYO Credit, and other altcoins are traded, bought, and exchanged instantaneously for immediate delivery. It is also where traders hold their crypto assets until their value increases. Here, transactions are done on the spot, hence the name spot trading.
Traders in a spot market can easily exchange their cryptocurrency for another crypto or fiat currency by placing a buy or sell order. Their goal is to make a profit by buying low and selling high. However, due to the crypto market's volatility, it is not guaranteed that earning through spot trading works all the time.
Also included in the spot market are:
- Sellers: the ones who create an order with a specific sell price.
- Buyers: the ones who place an order with a bid or purchase price.
- Order book: it is where the bids and asks of a trader are recorded.
- 1.Bid price: the highest price that a buyer is willing to pay.
- 2.Ask price: the lowest price of a payment that a seller is willing to accept.
There are three concepts of spot trading that traders should keep in mind:
- Spot price: the current price of an asset
- Trade date: the day when the market will perform the trade.
- Settlement date: also known as spot date, this is the time when the traded assets will be transferred to the involved accounts.
Last modified 1mo ago