A
- Auto-deleveraging (ADL)
- A last-resort tool: when the insurance fund cannot cover a liquidation, the exchange closes part of profitable positions on the opposite side. Your winning trade can then be closed without your order, at the bankruptcy price of the liquidated position, which may differ from the current market price. If a trade closed in a way you did not expect, check the common problem situations.
- Available balance
- The part of your money that is free to open new positions, transfer or withdraw. In cross margin, losses on open positions reduce it. Check it before you withdraw profit, because money used as margin cannot be moved.
B
- Basis
- The difference between a futures price and the spot price of the same asset. Example (illustrative): if a dated future trades at 61,000 and spot at 60,000, the basis is 1,000, and it shrinks towards zero by expiry. It matters most when you compare perpetual and dated futures.
- Break-even price
- The price at which closing the position gives zero result after fees, and sometimes funding. Example (illustrative): with a 0.05% fee on entry and on exit, a long from 60,000 needs about 60,060 just to break even. Check your costs with a fee calculator.
C
- Coin-margined (COIN-M) contract
- A contract where margin and profit or loss are in the coin itself, for example BTC, and the formula is different from USDT contracts. The dollar value of your margin also moves with the coin price, which adds a second layer of risk. Make sure you understand what crypto futures are before choosing this type.
- Contango and backwardation
- Contango means futures trade above the spot price; backwardation means they trade below it. These states show market mood and affect the price you get on dated futures, but they do not tell you where the price will go next. Read more in perpetual vs dated futures.
- Contract size
- The amount of the asset that one contract represents; some exchanges count quantity in coins, others in contracts or in USDT. Before you order, check which unit the quantity box uses, or your position may be much bigger or smaller than you meant. It also explains why minimum order amounts differ between contracts.
- Copy trading
- A service that automatically repeats another trader's trades in your account. You lose money when they lose, past results do not predict future results, and the lead trader usually takes a share of profit. Learn how copy trading actually works before you put money in.
- Cross margin
- A margin mode where your whole free futures balance supports all your open positions. This can delay liquidation, but one bad trade can use up the balance of your whole futures account. Compare it with isolated mode in cross vs isolated margin before your first trade.
D
- Dated (delivery) futures
- A futures contract with a fixed expiry date, when it is settled and closed. Its price moves towards the spot price as expiry gets closer, and it has no funding payments. Before you trade one, check the expiry date and compare perpetual and dated futures, because you must close or replace the position before it ends.
- Demo trading
- Practice trading with virtual money in a copy of the real terminal. It is good for learning buttons and order types, but fills and emotions differ, and demo profit does not predict real results. See how demo differs from live trading.
- Drawdown
- The fall of your balance from its highest point to a later low. Example (illustrative): from 1,000 to 700 USDT is a 30% drawdown, and you then need about a 43% gain just to get back to 1,000. Large drawdowns are a common reason why beginners lose money.
E
- Entry price
- The average price at which your position was opened; if you add to the position, it becomes a new average. Your profit, break-even point and liquidation price are all calculated from it. See one trade step by step for an example.
F
- Funding interval
- How often funding is settled; many exchanges use 8 hours, but some contracts settle every 4 hours or every hour, and the interval can change. Only traders holding a position at the exact settlement moment pay or receive. Estimate the cost of holding with a funding calculator.
- Funding rate
- A regular payment between long and short traders on perpetual futures; the exchange does not keep it. When the rate is positive, longs pay shorts; example (illustrative): a 10,000 USDT position at 0.01% pays or receives 1 USDT at each settlement. Learn when you pay and when you get paid before you hold a position for a long time.
G
- Grid bot
- A bot that places buy and sell orders at set price levels inside a range and earns small amounts when the price moves back and forth. The grid profit it shows is not the total result: you must also count the open position, fees and funding. Read how a futures grid works.
H
- Hedging
- Opening a position that offsets the risk of another one. Example (illustrative): if you hold 0.1 BTC on spot and open a 0.1 BTC short, price moves roughly cancel out, but you still pay fees and possibly funding. It is one of several approaches described in choosing your approach.
I
- Index price
- An average spot price of the asset taken from several large exchanges. It is the base for the mark price and for funding, so one exchange's odd trades affect it less. See why a contract shows several prices to understand how they connect.
- Initial margin
- The amount of margin needed to open a position, roughly the position size divided by the leverage. Example (illustrative): a 2,000 USDT position at 5x needs about 400 USDT of initial margin, plus money for fees. See one trade step by step with numbers to understand how it fits together.
- Insurance fund
- A reserve kept by the exchange to cover losses when a liquidated position closes at a worse price than its margin can pay for. It helps the exchange pay traders on the winning side, but only to the extent possible, not without limit. Whether you can end up owing the exchange money depends on each venue's rules, so do not treat the fund as a guarantee.
- Isolated margin
- A margin mode where each position can only lose the margin you assigned to it, unless you turn on automatic margin top-up. Example (illustrative): if a position with 50 USDT of isolated margin is liquidated, the rest of your balance is not touched. Many beginners find this easier to control, as explained in cross vs isolated margin.
K
- KYC (identity verification)
- The check where an exchange asks for your ID document and sometimes a selfie or proof of address. Most centralised exchanges require it before futures, and you must never use someone else's documents. Read whether you need KYC to trade futures.
L
- Last price
- The price of the most recent trade on this contract on this exchange. It can jump for a moment during fast moves, while the mark price moves more smoothly. Many exchanges let you choose whether a stop triggers on last price or mark price, so check this setting when you set a stop loss.
- Leverage
- Leverage lets you open a position bigger than the money you put in as margin. Example (illustrative): with 100 USDT of margin at 10x you control a 1,000 USDT position, so a 1% move against you costs 10 USDT, or 10% of your margin. Learn what leverage is before you choose a number, because higher leverage moves your liquidation price closer.
- Limit order
- An order to buy or sell only at your chosen price or better. You control the price, but the order may never fill if the market does not reach it. See when to use market or limit orders.
- Liquidation
- A forced closing of your position by the exchange when your margin can no longer cover the loss. You usually lose most or all of the margin of that position, and many exchanges also charge a liquidation fee. Learn what liquidation is in simple words and plan your stop-loss so that it closes the trade first.
- Liquidation price
- The mark price at which your position will be liquidated. It depends on leverage, maintenance margin, margin mode, fees and, in cross mode, your other positions; at 10x, a move of about 10% against you uses up the initial margin, and liquidation usually comes a little earlier. Check it before you open a trade with a liquidation calculator.
- Liquidity
- How easily you can buy or sell without moving the price much. Low liquidity means wider spreads, more slippage and stops that may fill at worse prices. For example, on stock and index perps, liquidity can be thinner at night and on weekends.
- Long
- A position that makes money when the price goes up and loses money when it goes down. Example (illustrative): a long of 0.01 BTC opened at 60,000 USDT and closed at 61,000 USDT earns 10 USDT before fees. See what long and short mean for the basic idea.
M
- Maintenance margin
- The minimum margin you must keep to hold a position open; it is smaller than the initial margin and usually grows for larger positions. If your margin balance falls below it, the exchange starts liquidation. It is one of the main inputs that decide at what price your trade gets liquidated.
- Maker and taker
- These are roles in a trade, not order types: a maker's order waits in the order book, and a taker's order fills against it immediately. A limit order that fills at once is a taker, and on most exchanges takers pay a higher fee. Compare costs in which exchanges have the lowest fees.
- Margin
- Margin is the money you lock as collateral to open and keep a futures position. It is not the size of the trade: profit, loss and fees are calculated on the full position. Understanding how margin differs from trade size helps you see your real risk.
- Margin balance
- Your wallet balance plus or minus the unrealized PnL of open positions. The exchange compares it with your maintenance margin to decide whether liquidation happens. Watch this number, not just the wallet balance, while a trade is open.
- Margin ratio
- A number that shows how close your account or position is to liquidation, based on your maintenance margin and your margin balance. Exchanges calculate and show it differently: on some, a rising ratio means danger, and on others a falling one does. Read the explanation in your app and learn how liquidation works, so you know which direction is the warning sign.
- Mark price
- A fair price calculated from the index price, used by exchanges for liquidation and usually for unrealized PnL. A short spike in the last traded price may not liquidate you if the mark price does not move as far. Read which price decides your trade to avoid surprises.
- Market order
- An order that fills immediately at the best prices available in the order book. It is fast, but you usually pay the higher taker fee and may get a worse price than you saw. Compare it with limit orders in market or limit order.
N
- Notional value (position size)
- The full value of your position: quantity multiplied by price. Example (illustrative): 0.05 BTC at 60,000 USDT is a 3,000 USDT position, even if your margin is only 300 USDT. Fees and profit or loss are calculated on this full amount, as explained in what fees you pay.
O
- Open interest
- The total number of futures positions that are open and not yet closed. Rising open interest shows more money entering the market, but not its direction, because every long has a short on the other side. Treat it as background information, like other indicators a beginner may use.
- Oracle
- A system that brings outside prices, such as spot prices from big exchanges, onto a blockchain. On perp DEXes, oracle prices often feed the mark price and liquidations, so an oracle error could close positions unfairly. Check how a venue such as Hyperliquid sources its prices.
- Order book
- The live list of buy and sell limit orders waiting at different prices. It shows how much can be traded near the current price before the price moves. You will see it in the trading terminal, next to the order form.
P
- Partial liquidation
- On some exchanges, a large position is closed only in part to bring the margin back above the maintenance level. You still take a real loss on the closed part, and the rest can be liquidated if the price keeps moving against you. Treat it as a serious warning, and read about futures risks and how to limit them.
- Perp DEX
- A decentralised exchange for perpetual futures, where you trade from your own crypto wallet. You keep control of your funds, but you are fully responsible for wallet security, and there are smart-contract risks and less support. Learn how to trade futures from a wallet.
- Perpetual futures (perps)
- A futures contract with no expiry date, so you can keep it open as long as you have enough margin. Its price stays close to the spot price through regular funding payments between buyers and sellers. If you plan to hold for weeks, you may pay or receive funding many times, so first learn how perpetual and dated futures differ.
- Position mode (one-way and hedge)
- In one-way mode you have one net position per contract; in hedge mode you can hold a long and a short on the same contract at the same time. In hedge mode, opening a short does not close your long, which confuses many beginners. One-way mode is usually simpler to start with.
- Post-only
- A limit order setting that makes sure your order is a maker; if it would fill immediately, it is cancelled instead. It helps you avoid the higher taker fee, but in a fast market your order may not get placed at all. Learn more about trading fees.
R
- Realized PnL
- The result that becomes fixed when you close all or part of a position. Many exchanges show it together with or separately from fees and funding, so always check your result after costs. Learn how to calculate your real profit.
- Reduce-only
- An order setting that only allows the order to make your position smaller or close it, never to open or increase one. Use it on exit orders so a mistake cannot open a new position in the opposite direction. See how to close a futures trade.
- Risk limit (leverage bracket)
- Tiers that set the maximum leverage and the maintenance margin for each position size: the bigger the position, the lower the allowed leverage. A large position can therefore be liquidated closer to your entry than you expect. Keep this in mind when you choose leverage for a first trade.
- ROE
- Return on equity: your profit or loss as a percentage of the margin used. Higher leverage makes the percentage bigger, but not the money; example (illustrative): 10 USDT profit is 10% ROE on 100 USDT margin and 20% on 50 USDT margin. Read whether leverage changes your profit to avoid being misled by large percentages.
S
- Short
- A position that makes money when the price goes down, and you do not need to own the coin to open it. If the price rises instead, your loss keeps growing, and there is no natural upper limit on how high a price can go. Read how you can profit on a falling price and always use a stop-loss on a short.
- Slippage
- The difference between the price you expected and the price you actually got. It is bigger for large orders, fast markets and coins with little trading. Slippage and fees are common reasons why trades closed in profit but the balance went down.
- Spot
- Buying or selling the actual coin, which you then own. There is no liquidation, and without borrowing you cannot lose more than you paid. Read how futures differ from spot to decide which fits you.
- Spread
- The gap between the best buy price and the best sell price in the order book. Each market order pays this gap, and on small coins it can be wide. This is one reason to choose liquid coins for your first trades.
- Stablecoin (USDT, USDC)
- A crypto token designed to stay at about 1 US dollar, often used as margin for futures. The peg can slip in rare stress events, and you depend on the company that issues it. Read how to buy USDT for your first deposit.
- Stop-limit order
- A stop order that places a limit order once the trigger price is reached. You control the worst price, but if the market jumps past your limit, the order may not fill and your loss stays open. This is why a stop loss is not a full guarantee.
- Stop-loss
- An order that closes your position automatically when the price reaches a level where you accept a loss. Decide this level before you enter, based on how much money you are ready to lose. Read why a beginner needs a stop loss.
- Stop-market order
- A stop order that sends a market order once the trigger price is reached. It almost always fills, but in a fast move or price gap the fill can be worse than the trigger price. Compare the two types in stop-market or stop-limit.
T
- Take-profit
- An order that closes your position automatically when the price reaches your profit target. It locks in gains even when you are not watching the screen. Learn how take profit works.
- Trailing stop
- A stop that follows the price at a set distance when the price moves in your favour, but does not move back. Example (illustrative): a long with a 2% trailing stop moves its stop to 61,740 when the price rises to 63,000. It can work together with a fixed exit, as shown in setting stop loss and take profit together.
U
- Unified trading account
- An account type on some exchanges where spot, futures and other products share one balance, so you may not need to move money from spot to futures. Your coins may also count as collateral for futures. A falling coin price can then reduce your margin and bring liquidation closer.
- Unrealized PnL
- The profit or loss of an open position at the current price, usually the mark price. It is not your money yet and can disappear quickly if the price turns. Use a profit and loss calculator to see what a move would mean before you trade.
- USDT-margined (USDⓈ-M) contract
- A contract where margin, profit and loss are all in a stablecoin such as USDT. Profit is simple to calculate: quantity × (exit price − entry price), reversed for a short. Many beginners start here because the result is in a dollar-like unit; see what USDT is.
V
- Volatility
- How much and how fast a price moves. With leverage, high volatility can liquidate you quickly; example (illustrative): a 10% move against a 10x position uses up the initial margin. Use smaller positions on volatile coins, as explained in how much to put into one trade.
W
- Wallet balance
- The money in your futures account, including realized profit and loss, fees and funding, but not unrealized PnL. Fees and funding are taken from it, even on trades that look profitable. See every fee that adds up.
