Crypto Derivatives Glossary
Plain-English definitions of the 12 most important terms in crypto derivatives and signal evaluation. Each entry links to the live data on our site, so you see the concept, then see it playing out in real markets. Skim the grid below or click into a term for the full explainer.
Funding Rate
Periodic payment between perpetual futures longs and shorts that keeps the contract tethered to spot.
Open Interest
Total notional value of all open futures positions at a given moment.
Basis
Price gap between a futures contract and its underlying spot index.
Liquidation
Forced closure of a leveraged position when its margin is exhausted.
Profit Factor
Ratio of gross winning trades to gross losing trades. Above 1 means the strategy is net positive.
Win Rate
Percentage of trades that closed profitably.
Basis Points (bps)
1 basis point = 0.01%. We use bps as the canonical unit for signal net return.
Slippage
Difference between the intended execution price and the actual filled price.
Dollar Cost Averaging (DCA)
Buying a fixed USD amount of an asset on a fixed schedule regardless of price.
Fear & Greed Index
Alternative.me's 0-100 gauge of market sentiment. We mirror it and blend it into our Retail Euphoria Index.
Pressure Score
Our proprietary 0-100 composite of derivatives stress per symbol.
Smart Money
Binance top-trader positioning, used as a contrarian or confirmatory signal vs retail.