How are you friends! I hope you are well, I am also Alhamdulillah. Friends today we will talk about spot trading and future trading. Today we will try to know what is spot trading and what is future trading. Not only that, we will also try to discuss spot trading and futures trading in a little more detail. So let's begin-
First we will talk about spot trading. Spot trading is basically what happens when you think you buy a commodity at a low price and sell it at a high price. Usually this is buying and selling as you market commodities. The equations of spot trading are relatively simple and very quick to understand as compared to futures trading. Let's give you a small example - suppose you bought 10 bananas from the market for Rs 100 today. And it was seen that after 3 days the price of that banana increased to 120 rupees, then you can sell that banana if you want. Then you got 20 rupees in the banana in which you invested 100 rupees. In spot trading there is no pressure on you to buy or sell, i.e. you buy when you want and sell when you want. Not only that, like when you bought 10 bananas for 100 rupees, if the price of bananas had gone down 2 days later, you could have bought more bananas and made more profit from your purchased bananas at the price of 120 rupees.
But now if we mention futures trading, futures trading is completely different from spot trading. Here you have to predict the future price of a commodity and invest your money accordingly instead of doing normal buying and selling. If your guess is correct then you will get back your money or whatever you invest and you will get different profit according to a certain amount like 2x, 4x or 6x or more. Let's give you another example about futures trading. Basically it can be compared to gambling in real life. For example, you bet on a team in the game of cricket that this team can win today and invest 1000 rupees. And you also had a condition that whoever wins today's bet will get 2x his deposit back. So if you win today's aji then you will get total money of 2000 taka. Usually futures trading is comparatively difficult due to its various conditions and complexity of understanding and not everyone can get into it easily. Also many Muslims try to avoid it because its activities are outside our religious rules. And it is largely considered haram
See, spot trading is much easier and much better than futures trading. Also in spot trading there is a high possibility of losing your funds as in futures trading. In futures trading, you trade for a specific period of time, if the price goes to the right place according to your prediction, you will profit and if the price does not go to the predicted place, you will lose your fund. But there are no such special rules in spot trading You can buy or sell whenever you want with profit or loss entirely on you.
Anyway guys I personally prefer spot trading over future trading. And I also advise people for spot trading. So guys that's all my post for today. I hope you enjoyed my post today. That's it for today, everyone stay healthy.