A Beginner's Guide to P2P, Spot Trading and Derivatives

Understand the P2P Trading Meaning

P2P stands for Peer to Peer trading, a decentralized form of exchange where individuals directly trade without intermediaries. , this is a type of trading where one can buy or sell cryptocurrencies directly without the involvement of third parties or any central server. It directly lets users buy and sell goods, services, or digital assets. Both parties directly interact with each other, reducing the transaction cost and increasing efficiency.

The advantage of P2P is that we can easily see the reputation of the buyers and sellers, whether they are reputed in the P2P networks or not. Let's have a quick look at the pros and cons of P2P crypto trading in more detail;

Pros of P2P (Peer to Peer) trading

There is no mediator in between who controls the exchange. P2P provides you with the perfect security and privacy for the users. 

Users can also do P2P trading without submitting personal information or completing their KYC. 

P2P transactions can be faster compared to centralized exchanges. This direct interaction often results in quicker transaction times as no additional layers of verification or approval are required.    

Cons of P2P (Peer to Peer) trading

In P2P, one can share data from any of the computers. That is a major issue that may lead to risk in data.

No backup for the files and folder. Every user is responsible for the viruses that occur which are not known to the network.

P2P users can only see their files once or if it is downloaded.

What is Spot Trading?

Spot trading is where cryptocurrencies or other assets are traded on the spot. In spot trading, traders buy cryptocurrencies at the current market price (at a lower price) and then sell them when the price increases, aiming to catch the big fish in their net. As mentioned earlier, spot trading is all about trading on the spot, which means transactions in these trading options are settled immediately without any future contract or settlement date. 

Spot Trading has three important concepts: Price, Trade Date, and Settlement Date. Traders commonly use it to take advantage of short-term price movements in the market.

Pros of spot trading 

Spot trading has many more advantages than another trading, such as future contracts. It provides more flexibility to the traders to hold their investment where they have invested.

Spot market provides a high level of transparency, and the transactions that take place are usually visible to the public, including the price, volume, and time of each transaction. 

It provides the immediate delivery of the assets.

Cons of spot trading

Spot trading is a highly volatile market carrying the risk of rapid price fluctuations, which can lead to higher losses for traders.

It usually requires traders to have full capital, limiting opportunities for those with limited funds.

Direct spot trading transactions expose traders to unreliable counterparties, resulting in potential financial losses.

What are Crypto Derivatives?

Derivatives are contracts that depend on the other underlying crypto assets. In derivatives, one can buy a crypto asset at lower prices and can sell it in the future at higher prices. It allows traders to speculate on the price of cryptocurrencies without owning them directly. The current market mainly has three types of crypto derivatives: Futures, Options, and Perpetual Contracts. These crypto derivatives allow traders to profit from rising and falling cryptocurrency prices.

Pros of Derivatives 

Increased liquidity and market access.

Potential for leverage and amplified returns.

Ability to hedge against price volatility.

Cons of Derivatives

Higher risk due to the volatility of the cryptocurrency market.

Regulatory uncertainty and potential for scams.

Lack of transparency and potential for market manipulation.

How to approach the right trading method?

To begin with P2P (Peer to Peer), Spot, and Crypto Derivatives, users can select a reliable exchange or trading platform. Currently, several cryptocurrency exchanges are available in the market, with which even a newbie can begin trading in various options just by conducting thorough research on the subject. Likewise, Binance, OKEx, CoinCRED Pro, Kraken, etc., are the different apps facilitating all these trading features and programs. 

The above content will be helpful for you in learning the P2P, spot trading, and derivatives program, their meanings, pros, and cons. We are here successfully announcing CoinCRED, which has turned out to be an international cryptocurrency exchange. So far, it has reached over 2 lakh crypto users from all over the world. Recently, it became a fully licensed crypto exchange in Dubai. Now, it is developing its pro version in the market with new features like P2P, spot trading, staking, derivatives program, and many more. In this beginner's guide, we will explore these trading options and provide insights on how to get started with CoinCRED Pro Exchange.

P2P Trading on CoinCRED Pro

CoinCRED's Peer-to-Peer (P2P) trading allows users to trade cryptocurrencies directly with each other without the involvement of intermediaries. This decentralized approach offers several benefits, including increased privacy, lower fees, and greater transaction control. 

Follow these quick steps

Sign up and verify your account on its app. 

Browse the available P2P trading pairs and select the cryptocurrency you wish to buy or sell.

Select the most suitable one based on price, payment method, and reputation.

Once the seller confirms the payment, the cryptocurrency will be transferred to your wallet.

Spot Trading on CoinCRED Pro

The spot trading on CoinCRED Pro feature allows users to buy, sell, and exchange cryptocurrencies at the current market price. This type of trading is ideal for those seeking immediate execution and direct ownership of the underlying assets.  

Follow these quick steps.

Sign up on the app. 

Deposit funds into your wallet.

Choose the cryptocurrency pair you wish to trade & Set the desired quantity and price at which you want to buy or sell the crypto.

Once the transaction is completed, the purchased cryptocurrency will be available in your Coincred wallet.

Derivatives on Coincred Pro

Coincred Pro Exchange also offers Derivatives trading, which allows traders to speculate on the price movements of cryptocurrencies without directly owning the assets. For now, it is initially launching with the Futures derivatives, and later on, planning to incorporate more trading options as well.

Follow these quick steps

Ensure you have funds available in your wallet.

Select the derivative program and crypto pair you want to trade. 

Set the quantity, leverage, and other parameters for the trade.

Monitor the market, execute a trade and manage your positions, set stop-loss orders, and track the performance. 

Many new features are in the catalog, which will soon be available on the CoinCRED Pro application.

Conclusion

This overviews the meaning and advantages of peer-to-peer, spot trading, and derivatives. The exchanges which provide these trading options and a brief description of CoinCRED and its pro version, which is soon going to enter the market. With its Spot trading, P2P trading, and derivatives trading features, Coincred empowers users to engage in seamless, secure, and diversified trading experiences. 

[Disclaimer: The information shared in this blog post solely belongs to the author. The main aim of providing the above content is to spread information only. Also, you are advised to do your own research before investing or trading in any such projects as they may be subject to market risks.]