Derivatives

An options contract that can be exercised at any time before or on the expiration date, offering maximum flexibility to the holder.

A risk management mechanism where profitable positions are forcibly reduced to cover losses from bankrupt liquidated positions when the insurance fund is depleted.

A market condition where the futures price of an asset trades below the current spot price, indicating bearish sentiment or strong immediate demand.

The price difference between a futures contract and its underlying spot price, representing the cost of carry and market sentiment.

A market-neutral strategy that profits from the price difference between a crypto asset's spot price and its futures price.

An options or futures strategy that simultaneously buys and sells contracts with different expiration dates on the same underlying asset.

A contract giving the buyer the right, but not the obligation, to purchase an asset at a specified price before a given expiration date.

An options strategy combining a protective put with a covered call to cap both upside and downside risk, reducing the cost of hedging.

A market condition where the futures price of an asset trades above the current spot price, reflecting positive carry cost and typically bullish sentiment.

A margin mode where your entire account balance serves as collateral for all open positions, maximizing liquidation distance but risking the full account on any single trade.

Two methods of settling futures contracts at expiry: physical delivery of the underlying asset, or a cash payment representing the price difference.

The rate of change of an option's price relative to a one-unit change in the underlying asset price, measuring directional exposure.

A portfolio or strategy with net zero directional exposure, designed to profit from factors other than price direction such as volatility or time decay.

An options contract that can only be exercised at expiration, not before, making it simpler to price and more common in crypto markets.

The periodic payment exchanged between long and short positions in perpetual futures contracts to anchor the contract price to the underlying spot price.

A market-neutral strategy that earns funding payments by going long spot and short perpetual futures, capturing the yield from elevated funding rates.

A condition where funding rates between exchanges significantly differ, creating arbitrage opportunities and signaling localized positioning imbalances.

A standardized agreement to buy or sell an asset at a predetermined price on a specific future date, enabling leveraged trading and hedging.

The rate of change of an option's Delta per one-unit change in the underlying price, measuring the acceleration of directional exposure.

The aggregate sensitivity of options market makers hedging activity to price changes, which can amplify or dampen spot price moves.

The effective leverage embedded in a market position derived from the ratio of open interest to available margin, revealing systemic risk levels.

The market's expectation of future price volatility, derived from options prices. Higher IV means the market expects larger price moves.

A reserve pool maintained by derivatives exchanges to cover losses when bankrupt positions cannot be liquidated at a positive price.

A derivatives contract denominated and settled in the base cryptocurrency rather than USD, creating non-linear payoff profiles.

An options strategy that profits from low volatility by simultaneously selling an out-of-the-money call spread and put spread, collecting premium.

A margin mode where each position has its own dedicated collateral, limiting the maximum loss on any single trade to the margin assigned to that position.

A derivatives contract denominated and settled in a stablecoin like USDT, providing straightforward linear payoff profiles.

The forced closure of a leveraged position by the exchange when the trader's losses approach their deposited margin, preventing the balance from going negative.

A chain reaction where forced position closures push prices further against other leveraged positions, triggering more liquidations in a feedback loop.

The automated system that forcibly closes positions when a trader's margin falls below the maintenance requirement, protecting the exchange from bad debt.

The minimum amount of collateral required to keep a leveraged position open, below which the position faces liquidation.

The collateral deposited with an exchange to open and maintain a leveraged trading position. If losses approach the margin amount, the position is liquidated.

A fair price estimate calculated by exchanges using spot price and a moving average to prevent unfair liquidations caused by temporary price wicks.

The price level at which the maximum number of outstanding options contracts expire worthless, representing maximum financial loss for option holders.

The total value of a leveraged position calculated as position size multiplied by the current market price, representing the actual market exposure.

The total number of outstanding derivative contracts (futures or options) that have not been settled, representing the total capital committed to a market.

The study of total outstanding derivative contracts to gauge market conviction, positioning, and the potential for leverage-driven price moves.

Mathematical measures (Delta, Gamma, Theta, Vega, Rho) that quantify the sensitivity of an option's price to various factors.

The difference in implied volatility between out-of-the-money puts and calls at the same distance from the current price, measuring directional sentiment.

A type of futures contract with no expiry date, using funding rate payments to keep the contract price anchored to the spot market. The most traded crypto derivative.

Options contracts without an expiration date that maintain their payoff profile indefinitely, combining perpetual futures mechanics with options payoffs.

A type of perpetual futures contract settled in the underlying asset rather than USD, creating direct exposure to the crypto asset's price movements.

A contract giving the buyer the right, but not the obligation, to sell an asset at a specified price before a given expiration date.

Futures contracts that expire on a fixed quarterly date, trading at a premium or discount to spot based on market sentiment and carry cost.

The difference between two related derivatives prices, such as the basis between futures and spot or the bid-ask spread on an options chain.

An options strategy that buys both a call and put at the same strike price, profiting from a large price move in either direction.

An options strategy that buys an OTM call and OTM put at different strike prices, profiting from a large move in either direction at a lower cost than a straddle.

The predetermined price at which an options contract can be exercised, determining whether the option expires in-the-money, at-the-money, or out-of-the-money.

The gradual erosion of an options premium as it approaches expiration, benefiting sellers and penalizing buyers who hold contracts too long.

The sensitivity of an option's price to a 1% change in implied volatility, measuring exposure to volatility shifts.

The difference in implied volatility between out-of-the-money puts and out-of-the-money calls, indicating the market's directional fear or greed.

A pattern in options pricing where implied volatility is higher for out-of-the-money and in-the-money options than for at-the-money options.