Crypto trading glossary
Sixty terms, defined in one sentence each, without the circular jargon.
What do crypto trading terms mean?
Most crypto trading terms describe one of four things: how positions are opened and closed, how costs are charged, how risk is measured, or how a market moves. This glossary defines sixty of the most common in a single sentence each, grouped by what they describe.
Positions and orders
How trades are opened and closed
| Spot | buying the asset itself, which you own and can withdraw |
| Futures | a contract tracking the price; you never own the asset |
| Perpetual | a future with no expiry, anchored to spot by funding payments |
| Long | a position that profits when price rises |
| Short | a position that profits when price falls |
| Market order | fills immediately at whatever price is available |
| Limit order | fills only at your price or better, and may never fill |
| Stop-market | becomes a market order when a trigger price is reached |
| Stop-limit | becomes a limit order when triggered; may not fill in a fast move |
| Post-only | cancels if it would fill immediately, guaranteeing maker fees |
| Reduce-only | can only shrink a position, never open a reverse one |
| OCO | a stop and target together; filling one cancels the other |
| Scaling in | entering a position in parts rather than all at once |
Leverage and risk
How exposure and danger are measured
| Leverage | borrowed exposure; 10× means $100 controls $1,000 |
| Margin | the collateral backing a leveraged position |
| Isolated margin | loss limited to the collateral assigned to one position |
| Cross margin | the whole account balance backs every position |
| Liquidation | the exchange closing your position because margin ran out |
| Maintenance margin | the minimum equity that must remain before liquidation |
| Mark price | a smoothed index used for liquidation, not the last traded price |
| Auto-deleveraging | profitable positions closed to balance the book in extreme events |
| Position size | risk budget divided by distance to stop |
| Drawdown | the fall from a peak in account value |
| Expectancy | average result per trade including losers |
| Profit factor | gross profit divided by gross loss |
| R multiple | reward expressed as a multiple of the risk taken |
| Risk of ruin | the probability a strategy ends the account |
Costs
Everything you pay
| Maker fee | charged when your order rests on the book adding liquidity |
| Taker fee | charged when your order fills against existing orders |
| Spread | the gap between the best bid and best ask |
| Slippage | the difference between expected and actual fill price |
| Funding rate | periodic payment between longs and shorts on perpetuals |
| Basis | the gap between futures price and spot price |
| Gas | the network fee paid to process an on-chain transaction |
| MEV | value extracted by reordering transactions, including sandwich attacks |
Market structure
How markets move
| Order book | the list of resting buy and sell orders by price |
| Depth | how much size rests near the current price |
| Liquidity | how easily an asset can be traded without moving price |
| Open interest | the total value of futures positions currently held |
| Support | a price area where buying has previously stopped declines |
| Resistance | a price area where selling has previously stopped advances |
| Stop hunt | price reaching a cluster of stop orders then reversing |
| Squeeze | a cascade where liquidations force more of the same move |
| Wick | the thin line showing prices reached but rejected |
| Wash trading | fake volume created by trading with yourself |
| Volume profile | how much traded at each price rather than each time |
| Gap | a price zone the market skipped and often revisits |
Valuation and supply
What a token is worth
| Market cap | price multiplied by circulating supply |
| Circulating supply | tokens currently in public hands |
| Total supply | tokens that exist, including locked ones |
| Max supply | tokens that will ever exist, if capped |
| FDV | price multiplied by maximum supply |
| Unlock | a scheduled release of previously locked tokens |
| Dominance | one asset's share of total market capitalisation |
| ATH | the highest price ever reached |
| Halving | the scheduled halving of Bitcoin's block reward |
DeFi and on-chain
Terms from outside the exchange
| Impermanent loss | a liquidity position underperforming simply holding the two tokens |
| Health factor | how close a borrowed position is to liquidation |
| LTV | loan value divided by collateral value |
| TVL | total value locked in a protocol or chain |
| Depeg | a stablecoin drifting from its target value |
| Oracle | the service feeding outside prices into a smart contract |
| Approval | permission granted to a contract to move your tokens |
| Rug pull | a token abandoned by its creators, usually via liquidity removal |
| Honeypot | a token you can buy but cannot sell |
| Airdrop | tokens distributed free, often for past protocol usage |
| Sybil filter | a system removing duplicate wallets from an airdrop |
| Seed phrase | the words that are your private key; possession is ownership |
| Cold wallet | storage that never connects to the internet |
| Bridge | a service moving assets between blockchains |
Common questions
What does rekt mean in crypto?
Slang for having suffered a severe loss, usually through liquidation. It comes from a deliberate misspelling of wrecked and is used both about individual traders and about the market as a whole after a cascade.
What is the difference between APR and APY?
APR is the simple annual rate with no compounding. APY includes compounding, so it is always the higher number for the same underlying rate. Protocols advertise whichever looks better, so check which one is quoted.
What does DYOR mean?
Do your own research. It is usually appended to promotional content as a disclaimer, and it does not transfer responsibility from the person making a claim to the person reading it.
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