<a href="/en/glossary/derivatives-and-leverage/auto-deleveraging/" target="_blank">Auto-Deleveraging (ADL)</a> is the last-resort mechanism activated by <a href="/en/glossary/derivatives-and-leverage/perpetual-futures/">Perpetual Futures</a> exchanges when the insurance fund is exhausted: when losses from a forced <a href="/en/glossary/derivatives-and-leverage/liquidation/">Liquidation</a> exceed the insurance fund's coverage capacity, the exchange system automatically force-closes the most profitable opposing-side positions (typically the highest-<a href="/en/glossary/derivatives-and-leverage/leverage/">Leverage</a>, highest-profit longs or shorts), using their profits to fill the <a href="/en/glossary/derivatives-and-leverage/liquidation/">Liquidation</a> shortfall. Traders subjected to ADL receive no advance warning — their positions are force-closed at the bankruptcy price when ADL occurs, even if that price may be far worse than the current market price.

A periodic payment mechanism used by perpetual contracts (derivatives with no expiry) to keep the contract price anchored to the spot price. When the rate is positive, longs pay shorts every 8 hours; when negative, shorts pay longs. It's not an exchange fee — it's a transfer between the long and short sides.

In derivatives trading, the <a href="/en/glossary/derivatives-and-leverage/margin/">Margin</a> mode determines how much capital backs a position and how much you can lose in a <a href="/en/glossary/derivatives-and-leverage/liquidation/">Liquidation</a>. Isolated <a href="/en/glossary/derivatives-and-leverage/margin/">Margin</a>: each position only has a fixed margin you pre-allocated to it; the maximum loss is capped at that margin, with the rest of the account unaffected. Cross margin: all available balance in the account acts as a shared collateral pool; positions can draw from each other — if one position is near <a href="/en/glossary/derivatives-and-leverage/liquidation/">Liquidation</a> it can automatically pull from other account funds to hold on, but if it's ultimately liquidated, the loss can affect the entire account balance.

A mechanism that amplifies position size using borrowed funds. For example, using $1,000 of your own capital at 10x leverage controls a $10,000 position — a 10% market rise earns you 100%, but a 10% drop liquidates you to zero. Leverage amplifies gains when direction is right, and equally amplifies the speed of losses when direction is wrong.

When a leveraged position loses so much that your <a href="/en/glossary/derivatives-and-leverage/margin/">Margin</a> can no longer support it, the exchange forcibly closes the position to stop losses from exceeding your deposit — this is <a href="/en/glossary/derivatives-and-leverage/liquidation/" target="_blank">Liquidation</a>. The price that triggers it is the liquidation price.

A <a href="/en/glossary/derivatives-and-leverage/liquidation/">Liquidation</a> cascade occurs when falling crypto prices force-liquidate large numbers of leveraged long positions simultaneously; the resulting forced selling pressure pushes prices further down, triggering more liquidations and forming a self-accelerating downward spiral. It's one of the main mechanisms of crypto market flash crashes: the first batch of liquidations triggers additional selling pressure, additional selling pushes more holders' positions below their liquidation thresholds, more liquidations bring more selling — until excess <a href="/en/glossary/derivatives-and-leverage/leverage/">Leverage</a> is purged and the market finds new equilibrium. The March 2020 and May 2022 crypto crashes both featured significant liquidation cascades.

Long and short are two opposite-direction trading strategies. Going long is betting on a rise — you buy an asset expecting to sell higher and profit from the difference, the direction everyone knows. Going short is betting on a fall — you first borrow the asset and sell it, then buy it back to return after it drops, profiting from the spread. In short, long bets price goes up, short bets it goes down. In crypto derivatives trading, both directions are available and often paired with <a href="/en/glossary/derivatives-and-leverage/leverage/">Leverage</a>, amplifying gains while also amplifying losses.

The funds you must deposit with the exchange as collateral when opening a leveraged position. <a href="/en/glossary/derivatives-and-leverage/margin/" target="_blank">Margin</a> comes in two forms: initial margin (required to open) and maintenance margin (the minimum to keep the position). If your account margin falls below the maintenance level, you're liquidated.

The mark price is the reference price exchanges use to determine whether your position triggers a forced <a href="/en/glossary/derivatives-and-leverage/liquidation/">Liquidation</a>, distinct from the last traded price you see on screen. It's typically calculated from a spot index price plus a <a href="/en/glossary/derivatives-and-leverage/funding-rate/">Funding Rate</a> component, designed to prevent whales or brief market anomalies from temporarily spiking or dumping the traded price to maliciously trigger retail liquidations. So: even if the traded price has fallen past your liquidation threshold, your position won't be force-closed as long as the mark price hasn't reached it — understanding this difference could be the line between your position surviving or dying.

The total number of futures or perpetual contract positions that remain open (not yet closed, settled, or liquidated) at a given moment. Rising OI means new positions are being established (capital flowing into derivatives); falling OI means positions are being closed or liquidated. It's a key structural indicator of how much capital is accumulated in the derivatives market and reflects market sentiment.

An options contract gives the buyer the right, but not the obligation, to buy or sell an underlying asset at a specific price (strike price) before a specific date. The buyer pays a premium to acquire this right; at expiry, if exercising the option is beneficial, the buyer can execute; if not, they can abandon it with maximum loss being the premium paid. In crypto markets, a Call Option lets you buy a crypto asset at a specific strike price before expiry (used when expecting a price rise); a Put Option lets you sell at a specific strike price (used when expecting a price decline or as a hedge).

A derivatives contract with no expiry date that lets you go long or short on crypto with <a href="/en/glossary/derivatives-and-leverage/leverage/">Leverage</a>. A funding-rate mechanism tethers its price to the spot market, so a position can be held indefinitely without forced settlement.