Why we trade spot only
Spot trading means you buy a coin at today's price and it is yours. You can hold it for a day or for ten years. Nobody can take it from you because the price moved against you.
Futures and leverage are different: you borrow money to bet on price. A 20% move against you can wipe out 100% of your money. Exchanges earn fees while most leverage traders lose.
For Muslims there are three problems with leverage and futures: riba (interest on the borrowed money), maysir (gambling-like speculation) and gharar (selling what you do not own). Spot avoids all three.
- Spot: you own the asset. Your maximum loss is what you paid.
- Leverage: you owe the exchange. Your loss can be everything, fast.
The richest long-term crypto holders are not leverage traders. They are patient spot buyers who never got liquidated.
Test yourself
In spot trading, what is the most you can lose?
- Everything, plus a debt to the exchange
- Only what you paid for the coin ✓
- Nothing, spot is risk-free
- Your exchange account
In spot you own the coin outright. The worst case is the coin going to zero. There is no debt and no liquidation.
Which of these makes leverage trading problematic in Islamic finance?
- It is too slow
- It involves interest, gambling-like risk and selling what you do not own ✓
- It uses the internet
- It only works on Bitcoin
Riba (interest), maysir (gambling) and gharar (excessive uncertainty) are the three concerns. Spot avoids all three.
A friend says a 10x leveraged trade is 'basically the same as spot, just faster'. What is true?
- He is right
- With 10x, a 10% move against you loses 100% of your money ✓
- Leverage has no extra risk
- Spot is more dangerous
Leverage multiplies both gains and losses. At 10x, a 10% drop is a total loss. Spot never liquidates you.
Roman Urdu mein parhein: Hum sirf spot kyun trade karte hain
Spot trading ka matlab: aap coin aaj ki qeemat par khareedte hain aur woh aap ka ho jata hai. Ek din rakhein ya das saal. Qeemat neeche jaye to bhi koi aap se cheen nahi sakta.
Futures aur leverage mukhtalif hain: aap udhaar le kar qeemat par shart lagate hain. Aap ke khilaf 20% harkat aap ka 100% paisa khatam kar sakti hai. Exchanges fees kamate hain jabke zyada tar leverage traders haarte hain.
Musalmanon ke liye leverage aur futures mein teen masle hain: riba (udhaar par sood), maysir (jue jaisi shart) aur gharar (jo apna nahi woh bechna). Spot in teeno se bachata hai.
- Spot: asset aap ka hai. Zyada se zyada nuksan wohi jo aap ne diya.
- Leverage: aap exchange ke qarzdaar hain. Nuksan sab kuch ho sakta hai, tezi se.
Crypto ke sab se ameer lambi muddat wale holders leverage traders nahi. Woh sabar wale spot khareedar hain jo kabhi liquidate nahi hue.
Aham baat: Jo khareedo us ke maalik bano. Udhaar ke paise se kabhi trade na karo.
Take the full course with quizzes, progress tracking and the Barqish Certified: Spot Trader Foundations certificate on the desk. Free.