Spot vs derivatives
Ownership today versus contracts that track price with leverage and funding.
5 min · Original LiquidityFlow guide
Spot trading means you exchange one asset for another and hold balances. If you buy 0.1 BTC with USDT, you own that BTC (subject to exchange custody risk).
Derivatives — perpetual swaps, futures, options — are contracts that reference a price. They can express long or short views with leverage, but they introduce funding, liquidation, and basis risk.
Retail users often confuse a green P&L on a leveraged position with “being up on crypto.” Spot P&L is about the asset you hold; derivatives P&L is about the contract plus fees and funding.
LiquidityFlow’s paper trader is spot-style practice against USDT. Use it to rehearse sizing and exits without leverage complexity.