When you set up a bot, one of the first choices is whether to trade spot or futures. They're fundamentally different — one uses leverage and one doesn't — and that difference changes your risk completely. This guide explains how each works on Freya and which is right for you.
Key Takeaways
- Spot means trading your own funds with no leverage — you can't be liquidated. Futures uses leverage, which amplifies both gains and losses and carries liquidation risk.
- Futures leverage is a position multiplier within a per-pair minimum–maximum range that Freya reads from your exchange.
- Spot bots need the Spot & Margin Trading permission on your API key; futures bots need Futures enabled.
- For futures, Freya sets up hedge mode (holding a long and a short at once); switching to it requires closing any existing one-way positions first.
- Beginners are usually better starting on spot; futures is for experienced traders who understand leverage and liquidation.
The Core Difference
- Spot — you buy and hold the actual asset with your own capital, one-to-one. If you put in 100 USDT, you control 100 USDT of the asset. There's no borrowing and no leverage, so a position can never be liquidated — the worst case is the asset's value falling.
- Futures — you trade with leverage, a multiplier on your capital. 100 USDT at 5× controls a 500 USDT position. That amplifies your gains and your losses, and introduces liquidation: if the market moves far enough against a leveraged position, the exchange closes it to prevent further loss.
Spot Trading
Spot is the simpler, lower-risk choice. You're trading real assets with your own money — no multiplier, no liquidation. It's well suited to DCA strategies and to anyone learning the platform. On your API key, spot trading needs the Spot & Margin Trading permission enabled (see How to Connect Your Exchange).
Futures Trading
Futures lets you trade with leverage for larger exposure from the same capital — but with proportionally larger risk. A few things to understand before using it:
- Leverage is a position multiplier. When you set up a futures bot, you choose a leverage level. Freya reads the allowed range for that pair from your exchange and shows it (for example, "this pair supports leverage between 1× and 20×").
- Liquidation is real. A leveraged position that moves far enough against you can be liquidated — see Why Is My Bot Not Trading? for how that shows up, and Risk Management in Automated Trading for how to control it.
- API permission. Futures bots need Futures enabled on your API key. Freya checks this when you connect.
Hedge Mode
For futures, Freya sets your exchange account to hedge mode — also called dual position mode — which lets you hold a long and a short position on the same pair at the same time. Freya prepares this automatically when you connect a futures key. One catch: if you already have one-way positions open, you'll need to close them before the switch to hedge mode can complete and your bot can start.
Which Should You Choose?
| Spot | Futures | |
|---|---|---|
| Leverage | None — you trade your own funds 1:1 | Yes — a position multiplier within a per-pair range |
| Liquidation risk | None | Yes — a leveraged position can be liquidated |
| Overall risk | Lower | Higher — amplified in both directions |
| API permission | Spot & Margin Trading | Futures enabled |
| Positions | Long (you own the asset) | Long or short, and hedge mode allows both at once |
| Best for | Beginners and lower-risk strategies | Experienced traders who want leverage |
If you're new, start with spot. It lets you learn how bots, grids, and exits behave without the added risk of leverage and liquidation. Move to futures once you're comfortable and you understand how leverage magnifies both sides of a trade.
Frequently Asked Questions
What's the difference between spot and futures on Freya?
Spot means trading the actual asset with your own funds and no leverage — you can't be liquidated. Futures uses leverage (a multiplier on your capital) for larger exposure, which amplifies gains and losses and adds liquidation risk. Spot is lower-risk; futures is higher-risk and more advanced.
What is leverage?
A multiplier on your position. At 5× leverage, 100 USDT controls a 500 USDT position. It increases both potential profit and potential loss, and it's why futures positions can be liquidated. Each pair has its own allowed leverage range, which Freya reads from your exchange.
Can I be liquidated on spot?
No. Spot has no leverage and no borrowing, so there's nothing to liquidate — the most that can happen is the asset's price falling. Liquidation only applies to leveraged futures positions.
What API permission do I need for futures?
Your API key must have Futures enabled (spot bots instead need Spot & Margin Trading). Freya checks the permission when you connect; the full setup is covered in How to Connect Your Exchange.
What is hedge mode?
Hedge mode (dual position mode) lets you hold a long and a short on the same pair at the same time. Freya sets your futures account to hedge mode automatically when you connect. If you already have one-way positions open, you'll need to close them first before the switch can complete.
Should a beginner use spot or futures?
Spot. It lets you learn how the platform and your strategies behave without the extra risk of leverage and liquidation. Once you understand how leverage amplifies both gains and losses, you can consider futures.