Liquid Edge supports both spot and futures trading. They are two different ways to trade the same asset, with different mechanics and different risks. Knowing which you're using is essential before deploying a strategy.
Spot#
Spot trading means buying or selling the actual asset for immediate settlement. If you buy 0.1 BTC on spot, you own 0.1 BTC.
- No leverage — you can only trade what you have.
- No liquidation — you can't lose more than you put in.
- Long only, in practice — you profit when the asset rises (you can't easily short spot).
Spot is the simpler, lower-risk venue and a sensible place to start.
Futures#
Futures trading means trading a contract whose price tracks the asset, rather than the asset itself. On perpetual futures you can:
- Go long or short — profit from rises or falls.
- Use leverage — control a larger position than your balance (see Leverage & Margin).
- Pay or receive funding — periodic payments between longs and shorts (see Market Data Explained).
Futures are more flexible and more dangerous. Leverage means a position can be liquidated — force-closed — if it moves too far against you.
Which should a strategy use?#
- Spot for straightforward accumulation and lower-risk strategies.
- Futures when a strategy needs to short, or deliberately uses leverage — with the extra risk understood and sized for.
Make sure your connected account and API key support the market type your strategy uses, and that the correct wallet is funded. See Depositing & Funding.