Glossary
What the words in crypto futures mean, in plain English. Each one links to the lesson that teaches it.
A
- Ask
- A sell order that waits in the book. The best ask is the lowest price that anyone will sell for now. Lesson: The order book
- Average fill price
- The total you paid divided by the amount you got, when an order fills at more than one price. Lesson: Slippage
B
- Bid
- A buy order that waits in the book. The best bid is the highest price that anyone will pay now. Lesson: The order book
- Break-even move
- How far the price must move your way before your PnL pays the fees. It is about the round-trip fees divided by the position size. Lesson: Maker and taker fees
C
- Closing a position
- An order on the opposite side, for the same size, that ends your position: sell to close a long, buy to close a short. Lesson: Long and short
- Cross margin
- One shared balance backs all your positions. A loss on one position can use money that holds up the others, and the whole account can be liquidated at once. The opposite of isolated margin. Lesson: Isolated and cross margin
D
- Depth
- How much waits to trade at and near the best prices, on one side of the book. Lesson: The order book
E
- Entry price
- The price at which you opened your position. Your PnL is the move away from it. Lesson: Long and short
- Equity
- A position's margin plus its unrealised PnL: what the position is worth to you now. Lesson: Margin
F
- Free balance
- The USDT in your account that no position is using. New margin and fees come from it. Lesson: Margin
- Funding
- Regular payments between longs and shorts on a perpetual future. They pull the perpetual price towards the spot price. On Cryptathon they are paid every 8 hours. Lesson: Funding
- Funding payment
- A payment between longs and shorts every 8 hours. Only positions open at the funding time pay or receive. Lesson: Funding
- Funding rate
- The share of the position value paid between longs and shorts at each funding time. Positive: longs pay shorts. Negative: shorts pay longs. Lesson: Funding
I
- Index price
- A price for the coin built from spot prices on other exchanges. A trade on this exchange does not change it. Lesson: Mark price and last price
- Initial margin
- The margin you lock to open a position. On Cryptathon it is position size ÷ leverage. Lesson: Margin
- Insurance fund
- A pool of money that takes over a liquidated position when the market cannot close it in time. Lesson: Liquidation
- Isolated margin
- Each position has its own margin. A price loss on one position cannot take money from your other positions or your free balance. The opposite of cross margin. Lesson: Isolated and cross margin
L
- Last price
- The price of the most recent trade on the order book. One big trade can move it a long way. Lesson: Mark price and last price
- Leverage
- How many times bigger your position is than your margin. At 10x, 100 USDT of margin opens a 1,000 USDT position. Lesson: Leverage
- Limit order
- An order to buy or sell at a price you set. It waits in the book until it fills or you cancel it. Lesson: Market and limit orders
- Liquidation
- The exchange closes your position because losses have used up your margin down to the maintenance margin. Lesson: Leverage
- Liquidation penalty
- A charge when a position is liquidated. On Cryptathon it is 0.5% of the closed size, capped at the margin left. Lesson: Liquidation
- Liquidation price
- The mark price at which your margin left falls to the maintenance margin and the position is closed. Below the entry for a long, above it for a short. Lesson: Liquidation
- Long
- A position that gains when the price goes up. Lesson: Long and short
M
- Maintenance margin
- The smallest margin a position may keep. On Cryptathon it is 0.5% of the position size. Lesson: Leverage
- Maker fee
- The fee for an order that waits in the book until someone trades with it. On Cryptathon it is 0.02% of the position size. Lesson: Leverage
- Margin
- The money you put into a position. It is what you can lose on that trade. Lesson: Margin
- Mark price
- The fair price the exchange uses to value open positions and to trigger liquidation. It is less jumpy than the last trade price. Lesson: Mark price and last price
- Market order
- An order that trades now at the best prices in the book. It pays the taker fee. Lesson: Market and limit orders
- Mid price
- The price halfway between the best bid and the best ask. Lesson: The order book
N
- Notional
- Another name for position size: the full value of a position at the current price. Lesson: Leverage
O
- Order book
- The list of buy and sell orders that wait to trade on one market, with the price and the size of each. Lesson: The order book
P
- Partial fill
- Part of your order has traded, and the rest has not traded yet. Lesson: Market and limit orders
- Perpetual future
- A contract that follows the price of a coin and has no expiry date. You hold a position, not the coin, and profit or loss is paid in USDT. Lesson: What a perpetual future is
- PnL (profit and loss)
- Your gain or loss on a position. It changes with every price move, before you close. Lesson: Leverage
- Position size
- The value of your position in USDT: coin quantity times price. At entry it is your margin times leverage. Lesson: Leverage
- Post-only
- An order that may only wait in the book and never trades at once. On Cryptathon every limit order is post-only. Lesson: Market and limit orders
- Price band
- How far from the mark price a market order may fill. On Cryptathon it is 1% each way. Lesson: Market and limit orders
- Price-time priority
- The matching order: the best price trades first, and at the same price the oldest order trades first. Lesson: The order book
R
- Reduce-only
- An order that can only make your position smaller. If it is bigger than the position, it is trimmed to the position, so it can never grow or flip it. Lesson: Reduce-only
- Reward-to-risk
- The gain at your take-profit divided by the loss at your stop-loss. At 3 to 1, the planned gain is three times the planned loss, before costs. Lesson: Take-profit and stop-loss
- Round trip
- To open a position and later close it: two trades, so two fees. Lesson: Maker and taker fees
S
- Short
- A position that gains when the price goes down. Lesson: Long and short
- Slippage
- The gap between the price you saw in the book and the average price you got. Lesson: Slippage
- Spot
- Buying or selling the coin itself, paid for in full. On spot you own the coin; on a perpetual future you hold a contract. Lesson: What a perpetual future is
- Spread
- The gap between the best ask and the best bid. Lesson: The order book
- Stop order
- An order that waits until the price reaches its trigger price, then becomes a market or limit order. Lesson: Stop orders
- Stop-limit order
- A stop that becomes a limit order when it triggers. It trades only at its limit price or better, so it may not trade at all. Lesson: Stop orders
- Stop-loss (SL)
- An order that sends a market exit when the price reaches a level of loss you set. It helps only if it sits closer than the liquidation price. Lesson: Take-profit and stop-loss
- Stop-market order
- A stop that becomes a market order when it triggers. It tries to trade at once against the orders in the book; the fill price is not guaranteed. Lesson: Stop orders
T
- Take-profit (TP)
- An order that sends a market exit when the price reaches a level of gain you set. For a long it sits above the entry, for a short below. Lesson: Take-profit and stop-loss
- Taker fee
- The fee for an order that trades at once against orders already in the book. On Cryptathon it is 0.05% of the position size. Lesson: Leverage
- Thin book
- A book with little waiting near the best prices. Market orders walk further in it, so they slip more. Lesson: Slippage
- Tick
- The smallest step a price can move. On Cryptathon one BTC tick is 0.5 USDT and one SOL tick is 0.01 USDT. Lesson: The order book
- Trigger price
- The price a stop order waits for. When the price reaches it, the stop becomes a normal order. Lesson: Stop orders
U
- Unrealised PnL
- The profit or loss on a position that is still open. It moves with the price and becomes fixed when you close. Lesson: Margin