HOMEWORK TASK: EXPLAIN SPOT TRADING AND MARGIN TRADING, ADVANTAGE AND DISADVANTAGE OF SPOT TRADING AND MARGIN TRADING. SUBMITTED BY @ayomide1110 (100% power up)

INTRODUCTION
Greeting to all my fellow Steemians
I am back again to present my homework given by @besticofinder

TOPIC III COVERED: HOW TO SPOT TRADE?

HOMEWORK TASK: EXPLAIN SPOT TRADING AND MARGIN TRADING, ADVANTAGE AND DISADVANTAGE OF SPOT TRADING AND MARGIN TRADING

Source
WHAT SPOT TRADE
Spot trade also called spot transaction, is known as the buying or selling of a foreign currency, financial instrument, or product for instant delivery in a specified spot date or instantaneous delivery. Spot trade also known as cash trade occurs in the spot market and are characterized by the immediate or near-immediate delivery of commodity. Foreign currency, stock or commodities are mainly transacted through spot trade.
Stock and commodities as said before are frequently bought and sold on the spot market. Example of how trade work, when a crude oil is sold for a certain price per barrel on the spot market, The oil is then delivered over time at the price that it was purchased.

ADVANTAGE OF SPOT TRADING
The interesting of spot trading as the name implies, trade are done and completed on spot, spot market help facilitate trading so it is dine in a transparent environment, where the price of the transaction are public information known to all parties. Another advantage for traders in spot market is that traders can hold and find a better deal if they are no satisfied with current prices.

DISADVANTAGE OF SPOT TRADING
All that has good also has bad, but one of the disadvantage is that due to the unsteadiness or fluctuation in price of some financial commodities, investor or buyers can buy on the spot at a inflated prices before the asset reach the normal price (true price). Hence trading on spot market is at owner risk, due to the volatility of assets.

WHAT IS MARGIN TRADING
Margin trading also called buying on margin, is the act of borrowing money from a stock broker to buy stock or other market securities. Margin trading can also be said as the buying and selling of stock with borrowed money. Margin trading is built on a thing called leverage, which is the idea of using borrowed money to buy stocks and make more money through investment.
Under margin trading you could buy twice as much stock than you can actually afford. So since you are to keep in mind that broker don’t lend margin fund for free, you will have to pay interest on them.

ADVANTAGE OF MARGIN TRADING
The advantage of margin trading is that it give you opportunity to invest in more stock than you can with just your cash in sense that you might be able to invest in two or three stock, , if you pick the right investment, margin can dramatically increases your profit. By borrowing you might be able to buy bigger stakes in each stock.

DISADVANTAGE OF MARGIN TRADING
As using leverage to increase investment size, as margin trading does also it a two sided edged sword, because a decrease in the value of the stock prior to when I was bought might after your investment and this is not the concern of the brokers because your debt most be paid and in case were the increase in the value of the stock is not much you gain less because you still have to pay your debt. But if in a case were a investor pick a wrong or die investment and the price fall below 50% of the actual price, you at loss because possibility your actual money is gone and you have to pay brokers so you have might have nothing left as your gain or actual cash you invested.

CONCLUSION
Well once again I want to thank the brains behind Crypto Academy this wonderful program, and also all the professor in program for the knowledge been dished out for free may God bless your work.
Thank you all for taking your time to read my article. Am also thankful to @besticofinder for dish out amazing lecture and give out intriguing homework.
Sir @besticofinder here is my home work hope it reached your expectation.

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