Crypto Futures Glossary
Every term you'll meet trading leveraged crypto, in plain English — with links to the calculator or guide for each. 36 terms and counting.
- Liquidation
- The forced closure of a leveraged position when losses consume the margin backing it. See the liquidation calculator.
- Liquidation price
- The price at which your position is liquidated. Long ≈ Entry × (1 − 1/Leverage + MMR).
- Leverage
- Borrowed exposure that multiplies both gains and losses. 10× means $1 controls $10. See leverage explained.
- Margin
- The collateral you post to open and hold a leveraged position.
- Initial margin
- The collateral required to open a position — roughly notional ÷ leverage.
- Maintenance margin (MMR)
- The minimum margin to keep a position open. Drop below it and you are liquidated.
- Isolated margin
- Margin mode where only the margin assigned to a position is at risk. See cross vs isolated.
- Cross margin
- Margin mode where your whole balance backs the position, lowering liquidation risk but exposing more capital.
- Perpetual futures
- A futures contract with no expiry, kept near spot by the funding mechanism.
- Funding rate
- A periodic payment between longs and shorts on perpetuals. See the funding fee calculator.
- PnL
- Profit and loss — the gain or loss on a position. See the PnL calculator.
- ROI
- Return on investment — the raw percentage the asset moved.
- ROE
- Return on equity — your return on posted margin, amplified by leverage. A 10% move at 10× ≈ 100% ROE.
- Long
- A position that profits when price rises.
- Short
- A position that profits when price falls.
- Position size
- How much of an asset you hold. Size it by risk with the position size calculator.
- Notional value
- The full market value of a position — size × price — not just the margin posted.
- Mark price
- A smoothed reference price used to calculate unrealised PnL and trigger liquidations, less manipulable than last price.
- Index price
- An average of spot prices across exchanges that anchors the mark price.
- Stop-loss
- An order that closes a position at a set price to cap losses. See how to set a stop-loss.
- Take-profit
- An order that closes a position at a target price to lock in gains. See the take-profit calculator.
- Risk/reward ratio
- Reward divided by risk on a trade. See risk/reward explained.
- Break-even win rate
- The win rate needed to break even at a given risk/reward — e.g. 33% at 2:1.
- DCA
- Dollar-cost averaging — building a position in tranches to smooth your entry. See the DCA calculator.
- Maker
- An order that adds liquidity to the book (a resting limit order), usually with a lower fee. See maker vs taker.
- Taker
- An order that removes liquidity (a market order), usually with a higher fee.
- Open interest
- The total value of outstanding futures contracts — a gauge of market participation.
- Slippage
- The difference between expected and executed price, worst in thin or fast markets.
- ADL
- Auto-deleveraging — when the insurance fund can't cover a liquidation, profitable opposing traders are partially closed.
- Insurance fund
- A reserve that absorbs bankrupt liquidations so winners get paid in full.
- Basis
- The gap between futures and spot price.
- Margin call
- A warning that your margin is running low before liquidation. See what is a margin call.
- Drawdown
- The peak-to-trough drop in account equity.
- Hedge
- A position taken to offset risk in another.
- Spot
- Buying the actual asset for immediate delivery — no leverage, no liquidation. See spot vs futures.
- Derivative
- A contract whose value derives from an underlying asset, like futures or options.