- Spot trading refers to the buying and selling of cryptocurrencies at the current market price. There are different order types for different purposes, such as market orders for immediate execution of the trade or limit orders for execution at a desired price.
- Spot Trading has many advantages such as a high degree of flexibility, immediate delivery and the low barrier of entry. Limitations include the high market volatility and the lack of leverage.
- Pexpay features 0% trading fees on selected pairs and deep liquidity powered by Binance ensuring the best market price. There are over 200 currencies to trade, advanced features and competitive prices to elevate your trading experience.
What is Spot Trading in Crypto?
Spot trading is the buying and selling of crypto at the current market rate – called the Spot price – with the intention of taking delivery of the underlying asset immediately. This makes the Spot market different from other types of trading, such as futures trading, where assets are bought and sold for delivery at a future date.
People engage in Spot trading for a variety of reasons, such as to take advantage of short-term price fluctuations in the market, to diversify their investment portfolio, or to speculate on the future value of a particular coin.
The Spot market is a type of financial market where financial instruments are traded for immediate delivery. In the next section, we will explain how the crypto Spot market works and guide you through all the important terms you need to know.
[Curious about common Spot Trading terms? Check out our Spot Trading Glossary]
How Does Spot Trading in Crypto Work?
When you engage in Spot trading, you are buying and selling digital currencies on the Spot market at their current market price.
How it works:
To buy, you place a buy order, which is matched with a seller's sell order, this is automatically done by the exchange's order book. Once matched, the digital currency is added to your wallet and the price is known as the Spot price.
To sell, you place a sell order, which is matched with a buyer's buy order, digital currency is removed from your wallet and the countervalue (for example BUSD) is added to your account balance.
Within Spot trading, you can choose to place different types of orders, such as market or limit orders.
What is a market order?
A market order is an order to buy or sell a specific amount of a cryptocurrency at the current market price. This means that your order will be filled at the best available price currently available on the market. Market orders are mostly used when you need to buy or sell a cryptocurrency quickly, as they are usually filled almost instantly. Traders usually use market orders in less volatile markets to ensure that their trade is more likely to be executed at the displayed market price.
What is a limit order?
A limit order, on the other hand, is an order to buy or sell a specific amount of a cryptocurrency at a specific price or better. This means that your order will only be filled if the market price reaches the price you specify. Limit orders are useful when you want to buy or sell a cryptocurrency at a specific price and are willing to wait for the market price to reach your desired level. In more volatile markets, it is recommended to use limit orders to ensure that your order gets executed at the specified price. Depending on the limit order price though, the limit order might take a long time or may not fill at all, depending on the price movements.
What is the trading volume?
In Spot trading, volume refers to the amount of a specific cryptocurrency that is being traded over a certain period of time. It's an indicator of the liquidity and activity of a market. High volume suggests a lot of buyers and sellers, low volume suggests less buyers and sellers.
REMEMBER: Depending on your trading or investment strategy, you might choose to either use market orders, limit orders, or a combination of those. Aside from Spot and limit orders, Pexpay offers even more order types for advanced users, such as Spot-limit, Trailing Stop and OCO orders.
[Learn more about the different order types in Spot trading on Pexpay]
Advantages & Disadvantages of Spot Trading
Advantages of Spot Trading
Beginner-friendly, low barriers to entry
The Spot market is highly liquid and accessible to traders of all levels, making it easy to start trading and is therefore suitable for beginners. Due to its simplicity, Spot market participants do not need to worry about liquidations, margins, funding rates and so on.
Spot trading allows you to buy and sell digital currencies at any time, giving you the flexibility to take advantage of short-term price fluctuations.
With Spot trading, you receive the digital currency you purchase immediately, unlike other forms of trading where you have to wait for delivery at a future date.
Disadvantages of Spot Trading
The Spot market can be highly volatile, which can result in substantial losses if trades are not executed correctly.
Lack of leverage
Unlike other forms of trading such as futures and margin trading, Spot trading does not offer leverage, which means you can't trade with more money than you have in your account. In comparison to margin trading, this means the potential gains are also limited.
No set price
The prices of cryptocurrencies on the Spot market are determined by the supply and demand, which means the prices can fluctuate rapidly and unpredictably.
Overall, Spot trading can be a great way for beginners to earn profits and for experienced traders to diversify their investment portfolio. However, it is important to keep in mind that Spot trading involves a significant level of risk and volatility, and it is crucial to have a good understanding of the market and a solid trading strategy.
Pexpay provides many benefits to its users and is therefore the best place for Spot trading, especially for beginners.
Benefits of Spot Trading on Pexpay
Pexpay offers a variety of benefits making it an attractive option for Spot traders. Some of the key benefits include:
0% trading fees
Pexpay does not charge any trading fees on selected pairs, allowing you to keep more of your profits. Clickhere to find out which pairs benefit from 0 fees. Pairs not included in this post are subject to the Spot trading fee. To learn more about trading fees, check out our article on What is Pexpay Spot Trading Fee and How to Calculate It.
BNB 25% fee discount
If you pay your trading fees with Binance Coin (BNB), you receive a 25% discount on your trading fees.
Powered by Binance - Best Market Depth
Pexpay has partnered with Binance to provide users with greater market trading depth on Pexpay Spot trading, and access to the same or even better liquidity than some of the largest exchanges in the world.
With an offer of over 200 cryptocurrencies, Pexpay provides you with a wide range of options to trade.
Best price on the market
Offering you the best prices on the market provides you with the opportunity to maximise your profits.
Features such as stop-loss and trailing stop orders allow you to manage your risk more effectively.
How do I get started with Spot Trading on Pexpay?
Step 1: Create an account on Pexpay
- Go to the Pexpay website and click on [Register]
- Enter your email address and create a strong password
- Verify your email address by clicking on the link sent to your email. Your account is now created.
Step 2: Deposit funds into your Pexpay account
- Click on [Deposit] in the top menu
- Select the coin you want to deposit (for example USDT)
- Follow the instructions to deposit funds into your Pexpay account
Alternatively, you can also convert your fiat currency to cryptocurrency by purchasing crypto such as USDT via P2P trading.
Step 3: Buy crypto on Pexpay's Spot trading platform
- Go to the trading platform by clicking on [Trade], then [Spot Trading] in the top menu
- Search for the token you want to trade (for example, Bitcoin) on the top right corner
- Select the crypto and choose the type of order (for example Limit)
- Specify the price you want to buy at and the amount you want to buy
- Review the details of your order, including the total cost and the Spot price
- Click on [Buy] to place your order. Once the token reaches your set price and the order is matched, it will execute automatically.
Step 4: Check your Pexpay Spot wallet
- Click on [Wallet] in the top menu and then on [Spot] on the left hand side
- Check that the crypto you bought is now in your Pexpay wallet
If you followed this guide until the end, you have successfully bought crypto on Pexpay's Spot trading platform! Remember to keep an eye on the market and be aware of the risks involved in trading.
Pexpay is committed to enhancing everyone’s trading experience, offering some of the lowest fees on the market at the best prices. If you encounter any issues, do not hesitate to contact us through our 24/7 customer support.
Beginners’ Guide to Pexpay Spot:
- How to Trade Spot on Pexpay App
- How to Do Spot Trading on Pexpay Website
- What is Pexpay Spot Trading Fee and How to Calculate It
- Different Order Types in Spot Trading
- What are Spot Market Makers and Takers
- How to Use Spot Trailing Stop Order
- What is the Stop-Limit Function and How to Use It
- What is an OCO (One-Cancels-the-Other) Order and How to Use It
- How to Resolve Order Issues