Glossary of Terms

Auto-Deleveraging (ADL): A last-resort mechanism that automatically reduces the profitable positions of opposing traders to help cover losses in extreme market conditions.

Backstop Liquidation: A process where, if orderbook liquidity is insufficient to liquidate a position via market orders, the position (and remaining collateral) is transferred to a dedicated vault that systematically closes it.

Collateral: Funds deposited into your account to secure open positions.

Cross Margin: A margin mode that uses your entire account balance to support all open positions, improving capital efficiency.

Funding Rate: A periodic fee, updated every hour, exchanged between long and short positions to keep the perpetual contract price aligned with the underlying spot market.

Impact Price: The average execution price calculated for a predefined notional amount from the orderbook, used to determine the Premium Index.

Initial Margin: The required collateral to open a position, calculated as the position size multiplied by the entry price, divided by the leverage.

Isolated Margin: A margin mode where each position is allocated its own specific collateral, limiting risk to that individual position.

Liquidation: The forced closure of a position when its margin falls below the required maintenance level.

Maintenance Margin: The minimum collateral that must be maintained to keep a position open, typically set at half of the initial margin.

Maker Order: An order that adds liquidity to the order book, such as a resting limit order.

Oracle Price (Mark Price): An aggregated price calculated from multiple external sources (weighted median from major centralized exchanges or TWAP from decentralized exchanges) used to determine margin requirements, funding fees, and liquidation thresholds.

Premium Index: A measure of the deviation between the Impact Price and the Oracle Price, used in funding rate calculations.

Taker Order: An order that removes liquidity by executing against existing orders in the order book.

Time-In-Force (TIF): The instruction that determines how long an order remains active (e.g., Good-Til-Cancelled, Immediate-or-Cancel, Add-Limit-Only).

TWAP (Time-Weighted Average Price): A method to calculate an average price over a specific period to mitigate the impact of market volatility on execution.

Withdrawal Controls: Mechanisms that restrict collateral withdrawals during periods of extreme volatility to ensure open positions remain adequately funded.