Crypto Futures Glossary
60 terms in plain English. For the ten we actually measure, the card carries today's number from our own feeds - and where the term is arithmetic, the calculator is in the card.
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Margin and money
What you put up, what you control, and what you get back. · 16 terms
Leverage
Borrowed size. It multiplies the move, the fee and the speed you get liquidated at.
Borrowed exposure that multiplies both gains and losses. 10× means $1 controls $10. See leverage explained.
Margin
Your own money, locked behind the position while it is open.
The collateral you post to open and hold a leveraged position.
Initial margin
What it costs to open: roughly notional divided by leverage.
The collateral required to open a position - roughly notional ÷ leverage.
Maintenance margin (MMR)
The floor. Fall under it and the position is closed for you.
The minimum margin to keep a position open. Drop below it and you are liquidated.
Isolated margin
Only the money you put on this trade can be lost.
Margin mode where only the margin assigned to a position is at risk. See cross vs isolated.
Cross margin
Your whole balance backs the trade - further from liquidation, more at stake.
Margin mode where your whole balance backs the position, lowering liquidation risk but exposing more capital.
PnL
What the trade made or lost.
Profit and loss - the gain or loss on a position. See the PnL calculator.
Position size
How much you hold. Decide it from the stop, never from the balance.
How much of an asset you hold. Size it by risk with the position size calculator.
Notional value
The full value you control - size times price, not what you posted.
The full market value of a position - size × price - not just the margin posted.
DCA
Building the position in pieces instead of all at once.
Dollar-cost averaging - building a position in tranches to smooth your entry. See the DCA calculator.
Drawdown
How far the account fell from its own high.
The peak-to-trough drop in account equity.
Unrealized PnL
The profit on screen. Not yours yet.
The paper profit or loss of an OPEN position, marked against the current price. It changes every tick and is not yours until the position is closed or partially closed.
Realized PnL
The profit after you closed, fees and funding taken out. The real one.
Profit or loss that has been locked in by closing (or partially closing) a position, after fees and funding. The number that actually changes your balance.
Entry price
The average price you got in at. Everything else is measured from it.
The average price at which your position was opened, including any adds. Everything else - PnL, ROE, liquidation distance - is measured from it.
Getting in and out
The orders that open a trade, close it, and decide it for you. · 12 terms
Stop-loss
The order that decides, in advance, how much this trade may cost you.
An order that closes a position at a set price to cap losses. See how to set a stop-loss.
Take-profit
The order that closes you in profit without you watching.
An order that closes a position at a target price to lock in gains. See the take-profit calculator.
Maker
You left an order waiting, so you pay the lower fee.
An order that adds liquidity to the book (a resting limit order), usually with a lower fee. See maker vs taker.
Taker
You took what was there, so you pay the higher fee - and the spread.
An order that removes liquidity (a market order), usually with a higher fee.
Hedge
A second position taken to cancel the risk of the first.
A position taken to offset risk in another.
Limit order
Your price or nothing.
An order that rests in the book at your chosen price and only fills at that price or better. Pays the lower maker fee on most venues, but is not guaranteed to fill.
Market order
Right now, at whatever it costs.
An order that executes immediately against the best available prices in the book. Guaranteed to fill, but pays the taker fee and suffers slippage in thin markets.
Post-only
Only if it can wait in the book - never as a taker.
An order flag that cancels your order instead of letting it execute as a taker - it guarantees you either make the market (lower fee) or do not trade at all.
Reduce-only
Can only make the position smaller. Never opens a new one by accident.
An order flag that can only shrink or close an existing position, never open or grow one. Standard protection on take-profit and stop orders so they cannot accidentally flip you.
Trailing stop
A stop that follows the price up and never back down.
A stop-loss that follows the price at a set distance while the trade moves in your favour, then triggers when price retraces by that distance - locking in profit without a fixed exit.
Partial close
Taking some off the table and letting the rest run.
Closing only part of a position - taking some profit or cutting some risk while keeping the rest of the trade on. The remaining position keeps the original entry price.
One-way vs hedge mode
Whether a long and a short on the same coin cancel out or sit side by side.
When it goes wrong
Liquidation and everything that leads to it. · 12 terms
Liquidation
The exchange closes your position for you because the margin ran out.
The forced closure of a leveraged position when losses consume the margin backing it. See the liquidation calculator.
last 24 hours$374.3M of BTC positions were closed by the exchange, not by their owner - $293.4M long and $80.8M short.
Liquidation price
The exact price at which that happens - and you can work it out before you open.
The price at which your position is liquidated. Long ≈ Entry × (1 − 1/Leverage + MMR).
Risk/reward ratio
How much you stand to make for every unit you are risking.
Reward divided by risk on a trade. See risk/reward explained.
Break-even win rate
How often you must be right at that ratio just to stay level.
The win rate needed to break even at a given risk/reward - e.g. 33% at 2:1.
Slippage
The gap between the price you expected and the one you got.
The difference between expected and executed price, worst in thin or fast markets.
ADL
When the insurance fund cannot pay, the exchange closes part of a WINNING trade instead.
Auto-deleveraging - when the insurance fund can't cover a liquidation, profitable opposing traders are partially closed.
Insurance fund
The reserve that pays the winners when a liquidation goes bankrupt.
A reserve that absorbs bankrupt liquidations so winners get paid in full.
Margin call
The warning before the liquidation. On most crypto venues it is very short.
A warning that your margin is running low before liquidation. See what is a margin call.
Liquidation cascade
One wave of liquidations knocking price into the next wave.
A chain reaction where one wave of liquidations pushes price into the next cluster of liquidation levels, firing more forced orders in the same direction. Cascades explain why leveraged markets overshoot. See them mapped on the liquidation map and measured daily in the recap archive.
last 24 hours$374.3M went on BTC alone. A cascade is what it looks like when most of that lands in the same few minutes.
Short squeeze
A move up driven by shorts being forced to buy back.
A sharp move UP fueled by shorts being forced to buy back - either stopped out or liquidated. Crowded shorts (negative funding, short-heavy positioning) are the fuel; the squeeze consumes it.
last 24 hoursShorts were force-bought out of $80.8M on BTC, against $293.4M on the long side.
Long squeeze
A move down driven by longs being forced to sell.
The mirror of a short squeeze: a sharp move DOWN accelerated by longs being forced to sell. Most common after crowded, over-leveraged rallies with heavy positive funding.
last 24 hoursLongs were force-sold out of $293.4M on BTC - more than the shorts lost, which is the shape of a squeeze down.
Stop hunt
A push through the price where everyone keeps their stops.
A quick push through an obvious price level where many stop-losses and liquidations sit, which fills larger players at better prices before the market reverses. Obvious round numbers and recent lows/highs are the usual targets.
What the market is doing
The numbers that describe the whole book, not your trade. · 12 terms
Funding rate
A small payment every few hours between longs and shorts. Positive means longs pay.
A periodic payment between longs and shorts on perpetuals. See the funding fee calculator.
Open interest
How much leveraged money is currently in the market.
The total value of outstanding futures contracts - a gauge of market participation.
right now$0 of open BTC positions.
Long/short ratio
Which way the crowd is leaning. Extremes tend to be the wrong way.
The share of accounts (or positions) that are long versus short a contract. Extremes are contrarian signals - a heavily long crowd is fuel for a squeeze down. Live per-coin readings: long/short dashboard.
right now73.7% of BTC accounts are long against 26.3% short - a crowded side, and the crowded side is the one with something to liquidate.
Liquidity
How much you can trade without moving the price yourself.
How easily size can be traded without moving the price. In futures it comes from order-book depth and active market makers. Majors like BTC are deeply liquid; small-cap perps are not - leverage there is far more dangerous.
Spread
The gap between the best buy and the best sell. You pay it every market order.
The gap between the best bid and best ask. A cost you pay on every market order, on top of fees - tight on liquid majors, wide on illiquid pairs.
Funding interval
How often funding is actually charged - usually every 8 hours.
How often perpetual funding is exchanged between longs and shorts - every 8 hours on most venues (some use 1h or 4h). The quoted rate applies per interval, so holding costs compound across a day. Live rates: funding dashboard.
Liquidation heatmap
A map of the prices where other people get liquidated.
A chart overlay estimating where liquidation levels cluster at each leverage tier, so you can see which price zones would fire the most forced orders. MarginPad's is at /heatmap; per-coin maps at e.g. /btc-liquidation-map/.
Fear & Greed Index
One number, 0 to 100, for how the market feels today.
A 0-100 composite of volatility, momentum, social and dominance data summarising crypto sentiment - extreme fear has historically marked better entries than extreme greed. Live reading: Fear & Greed page.
today30 / 100 - Fear. The middle, where it says least.
Volatility
How hard the price is moving. It decides how much room your stop needs.
How much and how fast price moves. Higher volatility means a wider liquidation buffer is needed for the same safety - a 1% daily-range coin and a 10% one cannot carry the same leverage.
Whale
An account big enough that its own exit moves the price.
A trader or wallet large enough to move the market. Large positions and their liquidations are visible in aggregate on whale tracking and the live liquidation feed.
The contract itself
What you are actually trading when you trade a perp. · 8 terms
Perpetual futures
A futures contract that never expires, held near spot by funding.
A futures contract with no expiry, kept near spot by the funding mechanism.
Mark price
The smoothed price the exchange liquidates you against - not the last trade.
A smoothed reference price used to calculate unrealised PnL and trigger liquidations, less manipulable than last price.
right nowBTC marks at $76,864, ETH at $2,239. This is the price your liquidation is measured against - not the last trade on one venue.
Index price
The spot average across exchanges that the mark price is anchored to.
An average of spot prices across exchanges that anchors the mark price.
Spot
Buying the actual coin. No leverage, no funding, no liquidation.
Buying the actual asset for immediate delivery - no leverage, no liquidation. See spot vs futures.
Derivative
A contract whose price comes from something else.
A contract whose value derives from an underlying asset, like futures or options.
Wick
The thin spike where price touched and did not stay.
The thin line above or below a candle body showing the extreme prices touched inside the period. Wicks through liquidation clusters are how over-leveraged positions die in seconds - and why MarginPad's paper trading settles a liquidation on the server against one-minute candles, never on a single price the browser happened to fetch.
Put the terms to work
Reading about it only gets you so far. Rehearse it free on our terminal, then take it to a real book once it clicks.
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