Search Results for: cryptocurrency

Position Limit

A position limit is a regulatory threshold that caps the number of contracts an entity can hold in a derivative market to prevent market manipulation.

Clearing House

A clearing house is a financial intermediary that facilitates the exchange and settlement of transactions between multiple parties in various markets.

Speculation

Speculation involves making high-risk financial transactions in hopes of significant gains, based on potential market movements.

Hedging

Hedging is a strategy used in finance to offset potential losses by taking opposite positions in related assets.

Delivery Date

Delivery Date refers to the specific day when goods are scheduled to arrive at their designated location after being shipped by the seller.

Backwardation

Backwardation is a market condition where future prices of an asset are lower than the current spot prices, indicating a tight supply or high demand.

Basis

Basis refers to the initial price paid for an asset, affecting profit calculations and tax implications upon its sale.

Open Interest

Open interest refers to the total number of outstanding derivative contracts, such as options or futures, that have not been settled.

Funding Rate

The funding rate is a periodic fee paid by traders to either long or short positions on perpetual contracts to balance price alignment with the spot market.

Tick Size

Tick size refers to the minimum price increment in which securities can be traded, affecting market liquidity and volatility.