Crypto & Quant Trading Glossary
Comprehensive definitions of 16 key crypto trading and quantitative finance terms. Each definition includes live data examples from the Algo Tick API.
All Terms
Funding Rate
A periodic payment exchanged between long and short traders on perpetual futures contracts. Positive funding means longs…
Open Interest
The total number of outstanding derivative contracts (e.g., perpetual futures) that have not been settled. Rising open i…
Liquidation
The forced closure of a leveraged trading position when the trader's margin falls below the maintenance requirement. Mas…
Market Regime
A statistical classification of the current market environment into distinct behavioral states. Common regimes include: …
Volatility
A statistical measure of the dispersion of returns for a given asset. Realized volatility is calculated from historical …
Order Book Imbalance
The ratio between bid-side and ask-side depth in the order book. Values above 0 indicate more buy orders (bid-heavy), wh…
Whale Flow
The aggregate buying and selling activity of large market participants (whales), defined as orders exceeding $100,000 in…
Arbitrage
The simultaneous purchase and sale of an asset in different markets or forms to profit from a price difference. In crypt…
Basis Trade
A delta-neutral arbitrage strategy that profits from the price difference (basis) between an asset's spot price and its …
Correlation
A statistical measure of how two assets move in relation to each other, ranging from -1 (perfect inverse movement) to +1…
Sharpe Ratio
A measure of risk-adjusted return, calculated as (Strategy Return − Risk-Free Rate) / Standard Deviation of Returns. A S…
Maximum Drawdown
The largest peak-to-trough decline in portfolio value during a specific period, expressed as a percentage. It measures t…
Hidden Markov Model (HMM)
A statistical model where the system being modeled is assumed to follow a Markov process with unobserved (hidden) states…
Smart Money
Capital controlled by institutional investors, hedge funds, or experienced traders who are perceived to have an informat…
Short Squeeze
A rapid price increase in an asset that forces short sellers to close their positions by buying, which further drives up…
Composite Trading Signal
A multi-factor directional signal that combines multiple data sources (momentum, funding, volatility, order flow, whale …
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