In the world of cryptocurrency trading, futures and margin trading are two distinct strategies that traders use to amplify their profits. Let's look at the main differences:

**Futures Trading**

Futures trading involves negotiating contracts that represent an agreement to buy or sell an asset at a predetermined price on a future date. In this type of trading, traders do not own the underlying asset but speculate with contracts based on its future price.

This modality usually offers high leverage, allowing traders to control significant positions with relatively small capital. Futures contracts have specific expiration dates and can be settled in cash or through the delivery of the asset, depending on the terms set.

**Margin Trading**

On the other hand, margin trading involves borrowing funds from a broker or platform to trade with larger positions than the trader's initial capital would allow. In this case, traders effectively buy or sell the underlying asset, but use borrowed money to amplify their potential profits ( or losses ).

Margin trading also employs leverage, although the level can vary significantly between platforms. It is important to note that borrowed funds incur interest, which adds an additional cost to the trade. Additionally, if the trade goes against the trader, they may receive a margin call, requiring them to add more funds to maintain their position or face liquidation.

**Fundamental Differences**

The main distinction lies in the control of the assets: while futures involve contracts, margin trading entails the actual buying and selling of assets using borrowed funds.

Both methods use leverage, but the structures and risk management differ. Futures contracts have a fixed expiration date, while margin trades can remain open as long as margin requirements are met.

Regarding costs, margin trading incurs interest on borrowed funds, whereas futures trading generally does not.

It is crucial to highlight that both strategies carry significant risks, especially due to the use of leverage, and are mainly recommended for experienced traders. Gate provides tools and educational resources for traders to better understand these trading modalities and make informed decisions.