🔤AshPerp Terms

Explain the new terms on AshPerp

Terms	Explanation
Market Order	An order to buy or sell a perpetual contract at the current market price, executed immediately.
Limit Order	An order to buy or sell a perpetual contract at a specific price or better. It is only executed when the market reaches the specified price.
Open Interest (OI)	Open interest is a critical metric that helps traders and analysts gauge market activity and sentiment. It represents the total number of outstanding contracts that have been entered into but not yet closed or settled by an offsetting trade. In other words, open interest tells you how many active positions exist in the market. When a trader opens a new long position, it increases open interest by one. When a trader opens a new short position, it also increases open interest by one. When a trader closes an existing position (either long or short), it decreases open interest by one.
Liquidation	When a trader's position is forcibly closed by the exchange due to insufficient margin to cover potential losses.
Margin	The collateral or initial deposit required to open and maintain a leveraged position in a perpetual contract.
Leverage	The use of borrowed funds to increase the size of a trading position, allowing traders to amplify potential profits or losses.
Positions	In perpetual trading, traders can take either long or short positions. A long position means a trader is buying the perpetual contract with the expectation that the underlying asset's price will rise, allowing them to profit. A short position means a trader is selling the perpetual contract with the expectation that the underlying asset's price will fall, enabling them to profit.
TP/SL Order	Take Profit Order: A predetermined price level at which a trader intends to automatically close a position to secure profits. Stop-Loss Order: A predetermined price level at which a trader intends to automatically close a position to limit losses.
Oracle	A trusted source of external data, often used to provide price information for derivatives contracts on DEXs.

Terms

Explanation

Market Order

An order to buy or sell a perpetual contract at the current market price, executed immediately.

Limit Order

An order to buy or sell a perpetual contract at a specific price or better. It is only executed when the market reaches the specified price.

Open Interest (OI)

Open interest is a critical metric that helps traders and analysts gauge market activity and sentiment. It represents the total number of outstanding contracts that have been entered into but not yet closed or settled by an offsetting trade. In other words, open interest tells you how many active positions exist in the market.

When a trader opens a new long position, it increases open interest by one.
When a trader opens a new short position, it also increases open interest by one.
When a trader closes an existing position (either long or short), it decreases open interest by one.

Liquidation

When a trader's position is forcibly closed by the exchange due to insufficient margin to cover potential losses.

Margin

The collateral or initial deposit required to open and maintain a leveraged position in a perpetual contract.

Leverage

The use of borrowed funds to increase the size of a trading position, allowing traders to amplify potential profits or losses.

Positions

In perpetual trading, traders can take either long or short positions.

A long position means a trader is buying the perpetual contract with the expectation that the underlying asset's price will rise, allowing them to profit.
A short position means a trader is selling the perpetual contract with the expectation that the underlying asset's price will fall, enabling them to profit.

TP/SL Order

Take Profit Order: A predetermined price level at which a trader intends to automatically close a position to secure profits.

Stop-Loss Order: A predetermined price level at which a trader intends to automatically close a position to limit losses.

Oracle

A trusted source of external data, often used to provide price information for derivatives contracts on DEXs.

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Last updated 4 months ago