Futures trading terms, in plain words.

The words our answers, the bot and Binance use, each in a sentence or two, with a page to read more where we have one.

Perpetual futures: A futures contract with no expiry date. You hold a long or short position for as long as you like, and a periodic funding payment keeps its price close to the spot price. Binance's USDⓈ-M contracts are perpetuals.Read more: What are crypto futures?
USDⓈ-M futures: Binance futures that are margined and settled in a stablecoin such as USDT, so profit, loss and margin are all counted in USDT. They have their own wallet on Binance, separate from Spot and Funding.Read more: Crypto futures trading for beginners
Spot market: Buying and selling the coin itself, paid for in full, for immediate delivery. There is no leverage and no liquidation: a spot holding can fall in value but is never closed for you.Read more: Spot vs futures, explained
Long: A position that gains when the price rises and loses when it falls. Opening a long is a buy; closing it is a sell.Read more: Long and short positions
Short: A position that gains when the price falls and loses when it rises. On futures you can open a short without owning the coin; closing it is a buy.Read more: Long and short positions
Leverage: How many times larger the position is than the margin behind it. At 5x, 20 USDT of margin opens a 100 USDT position, so a 1% price move changes the result by about 5% of the margin, in either direction.Read more: How leverage trading works · Leverage limits on Binance
Margin: The money set aside to keep a futures position open. Your free margin is what is left in the futures wallet for new positions; when it runs out, the exchange refuses new orders.Read more: Insufficient margin
Isolated margin: A margin mode in which each position has only its own margin behind it. A losing position can lose that margin and no more, and it is liquidated sooner than on cross margin.Read more: How the stop-loss works
Cross margin: A margin mode in which the whole futures balance backs every open position. A losing position stays open longer, but it can draw on money meant for the others, and one bad move can liquidate them together.Read more: Multi-Assets mode and cross margin
Maintenance margin: The smallest margin the exchange requires to keep a position open, as a share of the position's value. It is higher on smaller coins and larger positions; when the margin left falls to it, the position is liquidated.Read more: Why a stop is placed inside liquidation
Liquidation: The exchange closing a leveraged position because its margin can no longer cover the loss. On isolated margin you lose that position's margin; on cross margin the loss can reach the whole futures balance.Read more: Liquidated before the target? · Liquidation price calculator
Liquidation price: The price at which a position is liquidated. Higher leverage puts it closer to the entry: roughly 100 ÷ leverage percent away, and a little closer in practice.Read more: Liquidation price calculator
Entry price: The price a position was opened at. For a signal it is the price when the signal was sent, a reference rather than a promise; your own fill can differ.Read more: How to read a signal
Average entry price: When a position is built from several buys or sells, the size-weighted average of their prices. Profit, loss and liquidation are measured from it.Read more: Average entry calculator
Position size: How much a trade puts in. Some tools count it as the margin, others as the full position value; the position value is the margin times the leverage.Read more: Position size calculator
Order value (notional): The full value of an order: quantity times price, or margin times leverage. Exchanges set a minimum order value and a quantity step for each coin, and smaller orders are refused.Read more: Below the coin's minimum order
Stop-loss: An order that closes a position once the price has moved a set distance against it, to cap the loss. On leveraged positions it only protects you if it sits closer than the liquidation price.Read more: How the stop-loss works · How to set a stop loss in crypto
Take-profit: An order that closes a position at a set profit level, usually a limit order waiting at that price.Read more: Limit or trailing take-profit
Trailing stop: A stop that follows the price as it moves in your favour and closes the position when the price pulls back by a set percentage. It can keep more of a strong move, and closes nothing if the price never moves far enough to start it.Read more: Limit or trailing take-profit
Limit and market orders: A limit order waits at the price you set and fills only at that price or better. A market order fills at once at the best price available, which can be worse than the last price you saw.
Reduce-only order: An order that can only make an existing position smaller, never open or enlarge one. Take-profits and stops are usually sent this way, so they cannot open a new position by accident.Read more: Reduce-only order failed
Slippage: The difference between the price you expected and the price you got. It is larger in fast markets, on thin coins and for big orders.Read more: What is slippage?
Mark price: The price the exchange uses to value open positions and to decide liquidation. It is built from prices on several exchanges rather than the last trade alone, so a brief spike on one exchange does not liquidate positions.
Funding rate: A payment between longs and shorts on perpetual futures that keeps the contract price close to the spot price. When it is positive longs pay shorts, when negative shorts pay longs. It is settled at set times, often every eight hours, and the interval can differ by coin.
Unrealized and realized PnL: Profit and loss. Unrealized PnL is what an open position would make or lose if closed now; it becomes realized PnL when the position closes. Fees and funding come on top.
Drawdown: How far a position, an account or a record has fallen from its high point before recovering. A signal can be in a deep drawdown before it reaches its target, which is why leverage and stops matter.Read more: The live record · What missed (expired) means
One-way and hedge mode: Binance's two position modes. In one-way mode each coin has a single position, long or short; in hedge mode you can hold a long and a short on the same coin at once.Read more: Why auto-trading needs one-way mode · What is positionSide?
Multi-Assets mode: A Binance futures setting that lets several assets in the wallet back your positions together. In it, only cross margin is allowed.Read more: Refused for Multi-Assets mode · Binance Multi-Assets mode
API key: A pair of codes, the key and its secret, that lets a program act on your exchange account with the permissions you tick. Restricting it to one IP address means it works only from that server.Read more: Connect your Binance API key · When Binance refuses a key
TradFi perpetuals: Binance perpetual futures that track traditional assets such as shares, commodities and indices instead of a coin. Binance asks you to accept a separate agreement before you can trade them.Read more: The TradFi-Perps agreement

Missing a term? Send /support to @hafizebot or write to [email protected]. Futures trading carries a high risk of loss; nothing here is investment advice.