Crypto Futures Glossary

Every term you'll meet trading leveraged crypto, in plain English - with links to the calculator or guide for each. 60 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.

Long/short ratio

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.

Liquidation cascade

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.

Short squeeze

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.

Long squeeze

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.

Stop hunt

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.

Limit order

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

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

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

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-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.

Unrealized PnL

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

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.

Partial close

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.

Order book depth

How much resting buy and sell size sits at each price level. Deep books absorb large market orders with little slippage; thin books gap. Depth is why the same trade costs more on a small exchange.

Liquidity

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 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 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 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

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.

One-way vs hedge mode

One-way mode nets longs and shorts into a single position per contract; hedge mode lets you hold a long AND a short on the same contract simultaneously. Beginners should stay in one-way - hedge mode doubles fees and hides risk.

Entry price

The average price at which your position was opened, including any adds. Everything else - PnL, ROE, liquidation distance - is measured from it.

Wick

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 requires close-confirmation, not wick touches.

Volatility

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

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.

Put the terms to work