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KuCoin, a cryptocurrency spot exchange.Credit: Official brand mark via Simple IconsOriginal sourceLicenseAll image credits

Spot trading exchanges one asset for another for delivery to the buyer’s account. A BTC/EUR market, for example, quotes the amount of euros offered for one bitcoin.

Trading pairs and the order book

An order book lists bids from buyers and asks from sellers. The gap between the best bid and best ask is the spread. A trade occurs when compatible orders meet.

The last traded price is not a guarantee for the next order. Available liquidity, order size, and volatility can change the average execution price.

A trading pair has a base and quote asset

The pair shows what is being bought or sold and how its price is expressed. Reading the pair direction prevents confusing the asset amount with the price currency.

Fees, custody, and withdrawals

Exchanges may charge maker and taker trading fees, deposit or withdrawal fees, and currency-conversion costs. Compare the final preview, not only the displayed market price.

While assets remain on a centralized exchange, the exchange holds custody. Withdrawing to a personal wallet creates an on-chain transaction and requires the correct network and address.

A completed trade may still remain on the exchange

Spot execution changes account balances, but it does not automatically withdraw assets on-chain. Custody changes only when a withdrawal is completed.

Sources

  1. Coinbase Help — Understanding order types
  2. Coinbase Markets — Trading rules