What is Spot trading?

Spot trading is buying or selling the asset itself for immediate settlement: you pay dollars or a stablecoin and you own the bitcoin, the ether or the token, on the venue or in your wallet. It is the simplest form of crypto trading and the one most portfolios are built from, as opposed to derivatives, where you trade a contract that references the price without holding the asset.

On a centralized exchange, spot trades settle inside the exchange ledger: the balance changes in your account, and the asset stays in the exchange's custody until you withdraw it. On a decentralized exchange the trade is an on-chain swap between tokens in your own wallet, settled by a smart contract. Both are spot; they differ in who holds the result.

Spot positions carry no leverage, no funding and no liquidation, which is why they are the base layer of most portfolios. Their risk is price risk plus custody risk: an exchange balance depends on the exchange staying solvent and honest, a wallet balance depends on you keeping the keys. Spot is simple; the surrounding questions are not.

The accounting of spot trading is where cost basis lives. Every buy establishes a basis, every sell realises a gain or loss against it, and the method used, weighted average or specific lots, changes the number. Fees on each fill are part of the basis. This is the ledger a tax report is built from, and it has to be complete across venues to be right.

A tracker reads spot balances through read-only exchange keys and public addresses, records fills with their fees, and keeps the basis through transfers between your own accounts. TrueHold treats a transfer between two of your venues as a move, not a sale, so spot holdings keep their history when they change address.