Ever wondered what a spread between two coins actually means? 📊
🔹 A pair spread measures the difference between two coins, calculated as a price difference or ratio.
🔹 Coin prices vary greatly, so we compare relative changes instead of raw prices.
🔹 A pair trader tracks how the spread changes rather than just watching the price of one coin.
🔹 The spread rises when one leg outperforms the other, and falls when the opposite happens.
💡 Example: Coin A costs 10 and B costs 5, so the ratio is 2. If A becomes 11 and B stays at 5, the ratio turns into 2.2. The spread changed even though B did not move!
⚠️ Typical mistake: Looking only at the price of one coin and forgetting that you trade the difference between two assets.
How would you explain the spread to a friend in one sentence?
#Futures #CryptoTrading #CryptoEducation #RiskManagement
🔹 A pair spread measures the difference between two coins, calculated as a price difference or ratio.
🔹 Coin prices vary greatly, so we compare relative changes instead of raw prices.
🔹 A pair trader tracks how the spread changes rather than just watching the price of one coin.
🔹 The spread rises when one leg outperforms the other, and falls when the opposite happens.
💡 Example: Coin A costs 10 and B costs 5, so the ratio is 2. If A becomes 11 and B stays at 5, the ratio turns into 2.2. The spread changed even though B did not move!
⚠️ Typical mistake: Looking only at the price of one coin and forgetting that you trade the difference between two assets.
How would you explain the spread to a friend in one sentence?
#Futures #CryptoTrading #CryptoEducation #RiskManagement
