Crypto trading glossary
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Ask / Bid
The ask is the lowest price a seller accepts; the bid is the highest price a buyer pays.
Spread
The difference between the best ask and the best bid.
Maker / Taker
A maker adds an order to the order book; a taker fills an order already there. They can pay different fees.
Limit order / Market order / Stop-limit order
A limit order trades at your price or better. A market order trades at once at the best available price. A stop-limit order places a limit order when the market reaches your stop price.
Slippage
The difference between the price you expected and the price you got, usually on market orders in fast or thin markets.
Perpetual futures
A futures contract with no expiry date, which lets you go long or short with leverage.
Leverage
Trading a position larger than your margin. 10x leverage means a position worth ten times your margin.
Margin / Initial margin / Maintenance margin
Margin is the money backing a position. Initial margin is what you need to open it (position value ÷ leverage). Maintenance margin is the minimum needed to keep it open.
Cross / Isolated margin
Isolated margin limits the risk to one position's margin. Cross margin shares your futures balance across positions.
Mark price / Index price
The index price is the reference price of the asset. The mark price, based on the index and last price, is used for PnL and liquidation.
Funding fee
A periodic fee on perpetual futures positions, based on the funding rate.
Liquidation
The forced closing of a futures position when its margin is no longer enough.
Long / Short
Long profits when the price rises; short profits when it falls.
Reduce-only
An order that can only make your position smaller, never larger or reversed.
Take profit / Stop loss (TP/SL)
Orders that close a position automatically at a profit target or a loss limit.
PnL
Profit and loss. Unrealized PnL is on open positions; realized PnL is on closed ones.
KYC
Know Your Customer: identity verification.
2FA
Two-factor authentication: a code from your phone or email on top of your password.
Network / Confirmation
The blockchain a coin is sent on, and the number of new blocks after a transaction before it counts as final.
Tokenized asset
A crypto token designed to follow the price of a real-world asset such as gold or a share.
APR
Annual percentage rate: the yearly reward rate of a staking offer, without compounding.