Spot trading is the foundational method of buying and selling cryptocurrencies, representing the most direct and least complex way to participate in the digital asset market. It is the primary mechanism used by investors on SunCrypto to acquire, hold, and realize profits from assets like Bitcoin (BTC), Ethereum (ETH), and other altcoins.
If you are new to the crypto world, spot trading is the essential starting point, offering a transparent and lower-risk environment compared to advanced techniques like futures or margin trading.
What exactly is spot trading?
Spot trading is the process of instantly buying or selling a cryptocurrency at its prevailing market price for immediate delivery. The term “spot” refers to the immediacy of the transaction and settlement.
Key Characteristics of the Spot Market:
- Direct Ownership: When you execute a spot trade on SunCrypto (e.g., buying BTC with INR), you take direct, outright ownership of the actual Bitcoin. It is transferred immediately to your exchange wallet.
- No Leverage: Spot trading uses only the capital you possess in your account. Since you are not borrowing funds, there is no risk of liquidation—the worst-case scenario is that the value of your asset drops, but your position will not be forcibly closed.
- Simple Goal: The entire strategy rests on the principle of buy low and sell high to realize a profit.
- Trading Pairs: Spot trading always involves swapping one asset for another, known as a trading pair, such as BTC/INR (Bitcoin for Indian Rupees) or ETH/USDT (Ethereum for the stablecoin Tether).
How does spot trading work on SunCrypto?
SunCrypto simplifies the spot trading process, making it highly accessible for Indian users to trade with their INR balance.
Phase 1: Preparation
- KYC Verification: You must have a fully verified account on SunCrypto, as required for regulatory compliance in India.
- Fund Your Account: Deposit Indian Rupees (INR) into your SunCrypto wallet via the supported banking channels (UPI, bank transfer, etc.). This balance is your trading capital.
- Choose a Pair: Navigate to the Spot market section and select the trading pair you are interested in, for example, BTC/INR or DOGE/INR.
Phase 2: Placing the Order
The execution of a spot trade relies on the order book, which matches buyers and sellers based on the price they are willing to accept. You have two main order types:
| Order Type | Function | Execution | Best For |
| Market Order | An instruction to buy or sell immediately at the best available current market price. | Instant. Your order is filled right away. | Speed and guaranteed execution (often used when timing is critical). |
| Limit Order | An instruction to buy or sell only when the price reaches a specified limit you set. | Delayed. The order sits in the Order Book and only executes when the market price meets your target. | Controlling your entry/exit price and avoiding panic buying/selling. |
Example: If BTC is trading at ₹50,00,000, and you place a limit buy order for ₹49,00,000, the order will only fill if the price drops to ₹49,00,000 or lower.
Phase 3: Ownership and Exit
Once your buy order is executed, the crypto is instantly credited to your SunCrypto wallet. You now have full ownership and can choose to:
- HODL (Hold): Keep the asset long-term, waiting for a significant price appreciation.
- Sell for Profit: When you decide the price is satisfactory, you place a sell order (market or limit) on the same trading pair (e.g., selling BTC for INR), realizing the profit (or loss) in your INR wallet.
Compliance and risks in Spot Trading
While spot trading is safer than leveraged trading, it operates within the highly regulated and volatile Indian crypto market.
1. Market Volatility
Cryptocurrencies are known for extreme price swings. The primary risk in spot trading is that the price of the asset you bought suddenly drops significantly. Since there is no leverage, your maximum loss is limited to the amount you invested, but your capital is still exposed to market risk.
2. Indian Tax Compliance
SunCrypto, like all Indian exchanges, must comply with local tax laws:
- 1% TDS (Tax Deducted at Source): SunCrypto is mandated to deduct 1% of the total sale value (of any crypto asset, including stablecoins) at the time of the sell transaction. This is a deduction, not the final tax.
- 30% Tax on Net Gains: Any profit you realize from spot trading is subject to a flat 30% income tax in India, with no option to offset losses from other assets.
By using SunCrypto, the 1% TDS is handled automatically, simplifying a key part of the regulatory burden for the user.
Spot Trading vs. Futures Trading
| Feature | Spot Trading | Futures Trading (Derivatives) |
| Asset Ownership | Direct ownership of the actual crypto. | Trades contracts based on the asset price; no ownership of the underlying crypto. |
| Leverage | None. Uses only your deposited capital. | High leverage (e.g., up to 75x on SunCrypto). |
| Risk of Liquidation | None. You cannot lose more than your investment. | High Risk. Your position can be liquidated, resulting in the loss of all margin. |
| Profit Mechanism | Only profits when the price rises. | Profits when the price rises (long) or falls (short). |
For beginners and long-term investors focused on capital preservation and direct ownership, spot trading on SunCrypto remains the ideal entry point.
Disclaimer: Crypto products & NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions.