Every term a crypto futures trader runs into, explained in plain English — and linked to the calculator that puts the number to it.
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Borrowing from the exchange to control a position larger than your cash. 10x means $1,000 controls $10,000 — profit and loss are figured on the full amount, so a 1% move becomes a 10% swing on your margin.
The cash you post as collateral for a leveraged position. Initial margin opens it; maintenance margin is the minimum you must keep before liquidation.
When losses erode your margin below the maintenance requirement, the exchange force-closes your position at a loss. You don't choose the price — the exchange does.
The exact price at which your position is liquidated. Higher leverage puts it closer to your entry; at 100x it can be under 1% away.
A bet that price goes up — you buy first and profit if it rises.
A bet that price goes down — you sell borrowed coins first and profit if it falls, then buy back cheaper.
A futures contract with no expiry date. It tracks spot price using a funding mechanism, so you can hold a leveraged position indefinitely — as long as your margin lasts.
A periodic payment (usually every 8 hours) between longs and shorts that keeps a perp's price near spot. If you're on the crowded side, you pay it; hold for weeks and it adds up.
The minimum margin ratio you must hold to keep a position open — typically around 0.5%. Drop below it and you're liquidated.
The full size of your position (margin × leverage). Fees and funding are charged on the notional, not on your margin.
Profit and loss — the gain or loss on a position. Unrealised PnL is on an open position; realised PnL is locked in after you close.
Return on equity — your PnL as a percentage of the margin you posted, not of the notional. Leverage magnifies ROE in both directions.
An order that closes your position if price hits a level you set, capping your loss. It belongs where your trade idea is proven wrong, not at an arbitrary number.
An order that closes your position at a target price to lock in a gain automatically.
The difference between the price you expected and the price you actually got, caused by the market moving or thin liquidity while your order fills.
The gap between the best buy (bid) and best sell (ask) price. Wider spreads cost you more to enter and exit.
A maker adds liquidity with a limit order that rests on the book (lower fee); a taker removes liquidity with a market order that fills immediately (higher fee).
The live list of buy and sell orders at each price. Its depth shows how much size the market can absorb before price moves.
An order that fills immediately at the best available price — fast, but you pay the taker fee and risk slippage.
An order to buy or sell at a specific price or better. It may not fill, but you control the price and usually pay the lower maker fee.
The total value of outstanding derivative contracts. Rising open interest with rising price suggests new money; falling open interest suggests positions closing.
The difference between a futures price and the spot price. It's the engine behind cash-and-carry arbitrage.
Your entire account balance backs the position — harder to liquidate, but a bad trade can take the whole account.
Only the margin assigned to that trade is at risk. The position can be liquidated alone without touching the rest of your balance — safer for beginners.
The drop from a peak in your account (or a coin's price) to a trough. Deep drawdowns, not low returns, are what end most trading accounts.
The probability that a losing streak wipes out your account, given your risk per trade and edge. Small position sizing pushes it toward zero.
Deciding how much to risk on a trade — derived from your stop distance and a fixed risk percentage, not from the maximum margin the exchange allows.
The ratio of what you risk to what you aim to make. At 1:3 you only need to win ~25% of the time to be profitable.
The share of trades that are profitable. On its own it means little — a 90% win rate loses money if the 10% of losers are large enough.
The average profit or loss per trade over many trades: (win rate × avg win) − (loss rate × avg loss). Positive expectancy is the whole game.
Dollar-cost averaging — buying a fixed amount on a fixed schedule to smooth your entry price. Powerful for accumulation, dangerous as a way to average down a losing leveraged trade.
All-time high and all-time low — the highest and lowest price an asset has ever traded. 'Distance from ATH' gauges how much of a past run has been given back.
A coin's price × its circulating supply — the market's total valuation of it. A low price with a huge supply can still be a large market cap.
The value traded over a period. High volume means liquidity and conviction; thin volume means moves can be sharp and hard to exit.
How much price swings over time. High volatility means bigger moves in both directions — a reason to size positions smaller.
A sustained uptrend (bull) or downtrend (bear). The 200-day moving average is a common line for telling them apart.
Auto-deleveraging — when an exchange can't liquidate a position at a good enough price, it closes profitable traders on the other side to cover the loss.
Reducing leverage or position size across the market, often forced by liquidations cascading into more liquidations.
An offsetting position that reduces risk — for example, shorting a perp against spot holdings to stay market-neutral.
Profiting from a price difference for the same asset across markets or between spot and futures, ideally with little directional risk.
Leverage means borrowing from the exchange to control a position larger than your cash — 10x turns $1,000 into a $10,000 position. It multiplies both gains and losses and introduces liquidation risk.
A long profits when price rises (you buy first); a short profits when price falls (you sell borrowed coins first, then buy back cheaper). Both can be leveraged and both can be liquidated.
Liquidation is when your losses erode your margin below the maintenance requirement and the exchange force-closes your position at a loss. The liquidation price is set by your leverage — higher leverage means it sits closer to your entry.
⚠️ Educational only — not financial advice. Leverage trading can lose your entire deposit.