Terminology for positions

1. Perpetual Futures

A type of futures contract with no expiration or settlement date, allowing users to hold positions indefinitely. Perpetual futures use USDT as margin and support both long and short positions.

 

2. Margin

The funds required to open and maintain futures positions. Margin consists of Initial Margin and Maintenance Margin.

 

3. Leverage

A multiplier that allows users to increase their position size using a smaller amount of capital. While leverage can amplify profits, it also increases potential losses.

 

4. Open Position

The act of opening a futures position, either Long (Buy) or Short (Sell).

 

5. Close Position

The act of closing an open position by executing an order in the opposite direction, thereby realizing profits or losses.

 

6. Long Position (Go Long)

Opening a position by buying a contract with the expectation that the price will rise. Profits are generated when the market price increases.

 

7. Short Position (Go Short)

Opening a position by selling a contract with the expectation that the price will fall. Profits are generated when the market price decreases.

 

8. Margin Balance

The amount of funds available in an account that can be used as margin.

 

9. Maintenance Margin

The minimum amount of margin required to maintain an open position. If the margin balance falls below this level, the position may be liquidated.

 

10. Liquidation

The process by which the system automatically closes a position when the margin balance is insufficient to maintain it, in order to prevent further losses.

 

11. Mark Price

A fair price used to calculate Unrealized PnL and determine liquidation. The mark price is designed to prevent unnecessary liquidations caused by market manipulation or short-term price volatility.

 

12. Unrealized P&L

The profit or loss of an open position that has not yet been realized, calculated based on the mark price.

 

13. Realized P&L

The profit or loss that is realized after a position is closed.

 

14. Funding Rate

A periodic payment exchanged between long and short positions in perpetual futures to ensure that the contract price remains close to the spot price.

 

15. Average Entry Price

The average price at which a position is opened, weighted by position size.

 

16. Take-Profit

An order that automatically closes a position at a predefined price to lock in profits.

 

17. Stop-Loss

An order that automatically closes a position at a predefined price to limit potential losses.

 

18. Isolated Margin Mode

A margin mode in which margin is allocated to each position independently, limiting risk to the margin assigned to that position.

 

19. Cross Margin Mode

A margin mode in which all available funds in the account are shared as margin, with risk distributed across the entire account balance.