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Educational content, not investment advice.

Souq Dailyسوق ديليSouq Daily

Lesson 4 of 104:004 Sources

Spot vs futures vs crypto CFDs

Video coming soon

Presented by NourIn Arabic, with captions. Other languages are coming.

Educational content, not investment advice. Nour explains how markets work. She never tells you what to buy or sell.

"Trading Bitcoin" can mean three very different things.

  • Spot: you buy and own the coin; without borrowing, the most you can lose is what you paid, and you must protect the keys.
  • Futures: exchange-traded contracts with set sizes and expiry; CME's standard Bitcoin contract is 5 BTC and the micro is 1/10 BTC.
  • CFDs: you trade the price difference with a broker, own no coin, and pay spread and overnight costs.
  • Leverage magnifies losses fast: ESMA caps crypto CFD leverage for EU retail clients at 2:1, and the UK FCA banned crypto derivatives for retail consumers from January 2021.

Quick check

Three questions. Pick an answer to see why.

0/3

  1. 1.With a crypto CFD at a broker, what do you own?

  2. 2.What maximum leverage did ESMA set for retail crypto CFDs?

  3. 3.$1,000 account, price falls 10%. What is the loss on a 2:1 CFD position of $2,000?

Sources

Every fact in this lesson is backed by the sources below.

  1. 1.CME Group – Bitcoin futures (contract specs)CME Bitcoin futures contract size 5 bitcoin; Micro Bitcoin 1/10 of one bitcoin; CME CF Bitcoin Reference Rate
  2. 2.CFTC – Customer Advisory: Understand the Risks of Virtual Currency TradingFutures through leveraged accounts can amplify the risks
  3. 3.ESMA – Final product intervention measures on CFDs and binary options (2018)Retail CFD leverage limits 30:1 to 2:1, 2:1 for cryptocurrencies; margin close-out at 50%; negative balance protection; from 1 August 2018
  4. 4.FCA – FCA bans the sale of crypto-derivatives to retail consumers (Oct 2020)Ban on crypto derivatives and ETNs for UK retail consumers from 6 January 2021; extreme volatility; no reliable basis for valuation

Educational content, not investment advice. Risk warning: trading forex, CFDs, gold and crypto carries a high level of risk and may not be suitable for everyone. You can lose more than you put in. Souq Daily is an education platform. Nothing here is investment advice, a recommendation or an offer, and past performance does not predict future results.