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A Glossary of Terms

2-Factor Authentication (2FA) 2-factor authentication (2FA) is a second method of verification, beyond your password, to make your trades and other transactions secure. There are multiple methods of 2FA, including pieces of hardware (see U2F, below) and software like Google Authenticator. Never enable text messages or phone calls as a method of 2FA. This is one of the worst possible security practices because hackers are very skilled at calling your phone company, convincing them that they’re you, and then using text-message or phone-call 2FA to access your accounts.
Actuals Commodities on hand, ready for shipment, storage and manufacture.
Address Cryptocurrency addresses are used to send or receive transactions on the network. An address usually presents itself as a string of alphanumeric characters.
All-or-None (AON) Order An all-or-none (AON) order will be filled only if it can be executed in its entirety; it’s like an FOK order, but without the time limit. This can be useful if you’re trying to ensure that you get a certain price point for all of a moderate-sized order.
All-Time High (ATH) ATH is shorthand for all-time high, the highest price that an asset has ever had. A common fear in trading crypto is that FOMO will lead one to irrationally buy an asset at or near its ATH.
All-Time Low (ATL) ATL is an acronym for all-time low, the lowest price that an asset has ever had. Traders often fear that emotional forces like FUD will lead them to sell off an asset at or near its ATL.
Altcoin “Altcoin” is a term primarily used by Bitcoin maximalists, proponents of Bitcoin who think that it is superior to all other cryptocurrencies. They use this term to denote any and all cryptocurrencies that are not BTC.
Arbitrage Arbitrage is the strategy of profiting by simultaneously buying and selling an asset in order to take advantage of market inefficiencies by the same asset being priced differently in different places. Especially in this early stage of cryptocurrency’s history, where liquidity varies widely from one exchange to the next, there are numerous opportunities to exploit pricing differences between exchanges to profit through arbitrage.
ASIC Cryptocurrency addresses are used to send or receive transactions on the network. An address usually presents itself as a string of alphanumeric characters.
Ask A motion to sell (offer), indicating a willingness to sell a futures contract at a given price.
Ask Price The ask price for a given asset is the minimum price for which someone is willing to sell that asset. You can think of this as the “demand” side of “supply and demand.”
At the market An order to buy or sell at the best price possible at the time an order reaches the trading pit.
At the money In options, when the strike price equals the price of the underlying futures.
Bag holder A bag holder is an informal term for someone who holds an asset that continually decreases in value, to the point of being worthless. In the cryptocurrency space, this term is sometimes used pejoratively to refer to people who continue to hold onto an asset due to faith alone, long after all indicators point to the unlikelihood of its value ever increasing.
Base Metals: metals that oxidize or corrode relatively easily, and react variably with diluted hydrochloric acid (HCl) to form hydrogen. Examples include aluminum, nickel, lead, tin and zinc.
Basis The difference between the price of a futures contract and the underlying commodity’s spot (or cash) price.
Basis grade Specified grade, or grades. named in the exchange’s futures contract. Other grades deliverable are subject to price differentials from the basis or “contract” grade.
Bear Trap A bear trap is the opposite of a bull trap: It’s a false signal that a cryptocurrency’s price is about to fall, when it is actually about to rise. It can trick bearish investors into shorting the cryptocurrency or selling off their position in it. This often happens when it appears as if a cryptocurrency is about to break through a particular support level, but the support level ends up holding instead.
Bear Trend A bear trend is a long-term decline in the overall cryptocurrency market. “Long-term” usually means at least a few months (e.g., the bear trend beginning in mid-January of this year), and is represented by indicators like a negatively sloped MA.
Bearish an investor believes a stock will go down, or underperform
Bid refers to the price a market maker will pay for a security; it’s the price an investor would receive if selling the security
Bid Price The bid price for a given asset is the maximum price that someone is willing to pay for that asset. You can think of this as the “demand” side of “supply and demand.”
Bid-Ask Spread The bid-ask spread is the difference between the bid price and ask price for a given asset. This spread is the profit that market makers earn by buying and selling the asset on behalf of investors. As an asset’s liquidity increases, this spread decreases correspondingly.
Bitcoin (BTC) Bitcoin (BTC), conceived in a white paper by Satoshi Nakamoto in 2008, was the first modern cryptocurrency that paved the way for the larger cryptocurrency ecosystem. It is still the largest cryptocurrency by market cap. Its primary use cases are as a form of digital currency and as a digital store of value.
Bitcoin Cash Bitcoin Cash (BCH) forked from the Bitcoin network in August of 2017. Its developer team forked it with the intention of focusing more exclusively on the use case of a cheap, fast, convenient form of widely accepted digital cash.
Bitcoin SV Bitcoin SV (BSV, “Satoshi Vision”) forked from Bitcoin Cash’s blockchain in November 2018. Its creation was the result of a disagreement over Bitcoin Cash’s direction: the Bitcoin SV developers believe that their version of the cryptocurrency best reflects Satoshi Nakamoto’s original vision of what Bitcoin should be, as outlined in the Bitcoin white paper, Nakamoto’s forum posts, and Nakamoto’s emails. Bitcoin SV rejected certain updates adopted by the main Bitcoin Cash chain, including the introduction of code supporting smart contracts and canonical transaction ordering.
Black Swan A black swan event is something that is virtually impossible to predict and has a huge impact on the market. A standard example of a black swan event was Zimbabwe’s peak inflation rate of almost 80 billion percent back in 2008. Part of responsible risk management in trading involves considering the possibility of these impossible-to-predict, marketwide changes — especially in an extremely volatile market such as crypto. Why call this kind of unpredictable event a “black swan”? It pays homage to the idiosyncratic history of humankind’s knowledge of swans. Back in the 2nd century, the Roman poet Juvenal coined the phrase “rara avis in terris nigroque simillima cygno” to identify something as impossible. In English, this means “a rare bird in the lands and very much like a black swan” — a bird that, at the time, was thought to not exist. 17th-century Europeans commonly used this phrase to call something out as impossible — until, that is, Willem de Vlamingh and his team of Dutch explorers discovered black swans in Western Australia in 1697. No longer was the black swan a symbol of impossibility: instead, it evolved into a symbol of something seemingly impossible that could later become a reality. Nassim Nicholas Taleb popularized the term’s use with regard to financial markets in his 2001 book, Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets.
Block Blocks are packages of data that carry permanently recorded data on the blockchain network.
Block Height The block height is just the number of blocks connected together in the block chain. Height 0 for example refers to the very first block, called the “genesis block.”
Block Reward When a block is successfully mined on the bitcoin network, there is a block reward that helps incentivize miners to secure the network. The block reward is part of a “coinbase” transaction which may also include transaction fees. The block rewards halves roughly every four years; see also “halving.”
Blockchain A blockchain is a shared ledger where transactions are permanently recorded by appending blocks. The blockchain serves as a historical record of all transactions that ever occurred, from the genesis block to the latest block, hence the name blockchain.
Bollinger Bands Bollinger Bands — named after their developer, trader John Bollinger — are the lines two standard deviations above and below an asset’s simple moving average. They’re commonly used as indicators in technical analysis:
Breaking A quick decline In price.
Brent Crude Brent crude is a crude oil sourced from the North Sea (between Great Britain and Scandinavia). Brent crude is a light sweet crude oil, though not as light or sweet as the West Texas Intermediate (WTI). It contains approximately 0.37% of sulphur. Brent crude is suitable for production of gasoline and middle distillates.
Broker An individual or firm that arranges transactions between a buyer and a seller, and gets commissions when the deal is executed. In commodity futures trading, the term may refer to: (1) Floor Broker – a person who actually executes orders on the trading floor of an exchange; (2) Account Executive or Associated Person – the person who deals with customers in the offices of Futures Commission Merchants; or (3) the Futures Commission Merchant.
Bull Trap A bull trap is a false signal that a cryptocurrency’s price is about to rise, when it is actually about to fall. It gets its name from the fact that it ends up trapping bullish traders in bad trades.A typical example of a bull trap is when a cryptocurrency looks like it is about to break through a certain resistance level but subsequently fails to do so.
Bull Trend A bull trend is a long-term, upward trend in the overall cryptocurrency market. How different people specifically define it varies, but it’s typically on the order of months or years rather than days or weeks, and it’s associated with indicators like a positively sloped moving average (MA).
Bullion Precious metals that are traded based on their intrinsic metal value. Bullion may be in the form of bars, plates, ingots and coin.
Bullish an investor believes that a stock or the overall market will go higher
Buy on close To buy at the end of the trading session at a price within the closing range.
Buy on opening To buy at the beginning of a trading session at a price within the opening range.
Buy the Dips “Buy the dips” is a motto reflecting the philosophy that one should buy a cryptocurrency when its price has significantly dropped, with the expectation that it will bounce back eventually (especially if the cryptocurrency has compelling underlying value). It’s the second half of Warren Buffett’s timeless advice: “Be fearful when others are greedy, and greedy when others are fearful.”
Buy Wall A buy wall is basically the opposite of a sell wall: a large number of buy orders, typically placed on the order book all at once. There are at least a couple of reasons why HNWIs would put up a sell wall. One is to ensure that the cryptocurrency’s price doesn’t drop below the position of the sell wall (since anyone else who wants to buy the cryptocurrency quickly will have to execute their trade at a price higher than that of the sell wall). Another is to try to drive the cryptocurrency’s price up before the HNWIs sell some or all of their position in it.
Call An option that gives the buyer the right to a long position in the underlying futures at a specific price; the call writer (seller) may be assigned a short position in the underlying futures if the buyer exercises the call.
Candlestick Chart one of the ways to view or present a chart. The Candlestick Chart indicates the opening and closing price in a chosen date range; if the close price is higher than the open price, then that area of the candlestick is not shaded, and vice versa if the open price is higher than the close price.
Candlesticks Candlesticks are a graphical representation of an asset’s trading history. They’re often used in technical analysis because the shapes of candles are thought to be useful indicators of where an asset’s price might be heading next. Different candlestick charts use candlesticks to represent different amounts of time. For instance, on a 1-hour candlestick chart, each candlestick represents a trading period of 1 hour, whereas the candlesticks on a 15-minute chart represent trading periods of 15 minutes. The color of a candle indicates whether the asset closed at a higher or lower price than its open price for the period of time that the candle represents: A “bullish” green candle indicates that the asset closed higher than it opened, and vice versa for “bearish” red candles. The top and bottom of a candle’s true body indicate the open and close prices of the asset. The top of a bullish candle is the price at which it closed the period, and its bottom is the price at which it opened the period; vice versa for bearish candles. A candle’s shadows — the lines protruding from the top and bottom of its true body — indicate the maximum and minimum price of the asset during the candle’s period.
Cash Commodity The actual physical commodity. Sometimes called a spot commodity or actuals.
casper Casper is a protected and reliable utility for DApp based on Ethereum platform. It is the fastest way to ensure your DApp stores data, i.e., video, photo, audio, text, databases. It is implemented by joint effort of a variety of vendors, which provide their hard drives and internet-channels for storing and transferring your files. They will rent their facilities in exchange for monthly reward, such as tokens. Vendors may choose to become local data centers, which will ensure a higher access rate and low response time for all users, both individual and companies.
CFD (Contract for Difference) an object of a electronic transaction based on the price fluctuation of an underlying asset (e.g. stock or futures contract).
CFTC Commodities Future Trading Commission
Circulating supply An approximation of the number of coins or tokens that are circulating in the public market. See also: total supply and maximum supply.
Coin A coin is a unit of digital value. When describing cryptocurrencies, they are built using the bitcoin technology and have no other value unlike tokens which have the potential of software being built with them.
Cold Storage Cold storage is any kind of cryptocurrency wallet that is offline — e.g., a paper wallet or hardware wallet that is not connected to the internet. They’re thought to be especially secure because your private keys are kept away from places where hackers or other entities can find them. But they can also be harder to recover if you forget or lose your information (since, oftentimes, no one else has that information).
Commodities Exchange an institution, organization, or association that serves as a market for trading various commodities and derivatives products.
Commodity An article of commerce or a product that can be used for commerce. In a narrow sense, products traded on an authorized commodity exchange. The types of commodities include agricultural products, metals, petroleum, foreign currencies, and financial instruments and indexes, to name a few.
Confluence Confluence is the presence of multiple indicators or analytical methods all indicating the same upcoming movement in an asset’s price. This is a way of mitigating trading risk by waiting for multiple signals all forecasting the same thing, rather than just trading on the basis of a single indicator.
Contagion Contagion refers to a disturbance that spreads from one market to another and has the potential to disrupt trading strategies that focus too heavily on market correlations. For example, one might try to profit by watching a pair of tightly correlated cryptocurrencies, waiting for one of them to have a disproportionately low price, and then buying that disproportionately cheap cryptocurrency, with the expectation that its price will rise and restore the correlation between the pair. But if this is a case of contagion, the entire crypto market might be heading for a dip, meaning that one will have lost money by taking a long position on the disproportionately cheap cryptocurrency.
Contract Unit of trading for a financial or commodity future. Also, actual bilateral agreement between the parties (buyer and seller) of a futures or options on futures transaction as defined by an futures exchange.
Cryptoasset Cryptoassets are assets in the form of a digital token, secured by cryptography and built on blockchain technology. The term refers to the token itself rather than the software upon which it is built. For example, Ethereum’s cryptoasset is ether (ETH). In some cases, including Bitcoin, the software and the cryptoasset bear the same name — for those currencies, you can distinguish between them because the name of the software is capitalized (“Bitcoin”) while the cryptoasset is written in all lowercase (“bitcoin,” or “BTC”).
Cryptocurrency Also known as tokens, cryptocurrencies are representations of digital assets.
CTA Commodity Trading Advisor
Daily Trading Limit The maximum price range set by the exchange each day for a contract. A Trading Limit does not halt trading, but rather, limits how far the price can move in a given day.
Dapp A decentralised application (Dapp) is an application that is open source, operates autonomously, has its data stored on a blockchain, incentivised in the form of cryptographic tokens and operates on a protocol that shows proof of value.
Day Trading Day trading is like swing trading but with a higher trade frequency. As the name suggests, day traders trade multiple times per day, typically trying to routinely profit from small fluctuations in a market.
Decentralized Cryptocurrencies use decentralized control as opposed to centralized electronic money and central banking systems. The decentralized control of each cryptocurrency works through a blockchain, which is a public transaction database, functioning as a distributed ledger.
Decentralized applications (dApps) For an application to be considered a Dapp or decentralized application it must meet the following criteria (1) Application must be completely open-source, it must operate autonomously, and with no entity controlling the majority of its tokens. The application may adapt its protocol in response to proposed improvements and market feedback, but all changes must be decided by consensus of its users. (2) Application data and records of operation must be cryptographically stored in a public, decentralized blockchain in order to avoid any central points of failure. (3) The application must use a cryptographic token (bitcoin or a token native to its system) which is necessary for access to the application, and any contribution of value from miners/farmers should be rewarded with the application’s tokens. (4) The application must generate tokens according to a standard cryptographic algorithm acting as a proof of the value nodes are contributing to the application (Bitcoin uses the Proof of Work Algorithm)
Delivery The transfer of the cash commodity from the seller of a futures contract to the buyer of a futures contract. Each futures exchanges has specific procedures for delivery of a cash commodity. Some futures contracts, such as stock index contracts, are cash settled.
Depth Depth refers to the ability of a market for a specific asset to sustain large orders of that asset without the asset’s price moving significantly. The more open limit orders there are on both sides of an exchange’s order book for an asset, the more depth that book has. Depth is also closely tied to liquidity: The more depth an order book for an asset has, the more liquidity the order book provides to that asset.
Derivative Financial instrument derived from a cash market commodity, futures contract, or other financial instrument.
Differentials The premiums paid for the grades better than the basis grade and the discounts allowed for grades lower than the basis grades. These differentials are fixed by the contract terms on most exchanges.
Digital asset  digital asset is digitally stored content or an online account owned by an individual.
Digital commodity is a scarce, electronically transferrable, intangible, with a market value.
Digital identity A digital identity is an online or networked identity adopted or claimed in cyberspace by an individual, organization, or electronic device.
Digital Signature A digital code generated by public key encryption that is attached to an electronically transmitted document to verify its contents and the sender’s identity.
Distributed Ledger Distributed ledgers are ledgers in which data is stored across a network of decentralized nodes. A distributed ledger does not have to have its own currency and may be permissioned and private.
Distributed Network A type of network where processing power and data are spread over the nodes rather than having a centralised data centre.
Diversification Generally speaking, diversification is a method of managing the overall level of risk in your portfolio by investing in a range of assets that aren’t perfectly correlated with each other, securing better profits (on average), and minimizing the risk of losses. It can be hard to diversify within the crypto sector at this early stage of its existence, but there are a few rules of thumb that are good to follow:
Dollar-Cost Averaging Dollar-cost averaging is the strategy of buying a particular dollar amount of an asset on a regular schedule, e.g., X amount every hour or X amount every day. The idea behind this strategy, which plays well with HODLing, is to gradually take on a position in an asset like Bitcoin in a way that resists the short-term swings of the market.
Encryption Encryption is the process of turning a clear-text message (plaintext) into a data stream (cipher-text), which looks like a meaningless and random sequence of bits.
Energy Commodities Energy-generating products. Those include electricity, crude oil, ethanol, natural gas, crude oil distillates ( gasoline, gasoil, kerosene, diesel, heating oil) and coal.
ERC-20 This means that almost all of the wallets which support the ether currency also support ERC-20 compliant tokens. ERC-20 is technically still in draft form, meaning that it has gone unenforced by the broader Ethereum community.
Ether Ethereum is a blockchain-based decentralised platform for apps that run smart contracts, and is aimed at solving issues associated with censorship, fraud and third party interference.
Ethereum Ethereum (ETH), the second-largest cryptocurrency by market cap, was proposed by Vitalik Buterin in a 2013 white paper. This blockchain is intended to function as a kind of global, decentralized computer, with a Turing-complete programming language and a layer of smart contracts that allow developers to create everything from decentralized applications to tokens powering ICOs.
Ethereum Classic Ethereum Classic was created in the wake of the DAO hack, which resulted in the theft of 3.6 million ETH. While the majority of Ethereum stakeholders voted to rewrite the blockchain to erase the results of the hack, a vocal minority argued that doing so would undermine the entire concept of blockchain by violating its immutability. This minority refused to accept the revised code and became the Ethereum Classic currency. From these beginnings, Ethereum Classic has developed into something like a more conservative version of Ethereum, focused on immutability above all else.
Exchanges An exchange is a marketplace where people are able to buy and sell assets. The New York Stock Exchange (NYSE), for example, is a place where people are able to buy and sell stocks. There are a number of cryptocurrency exchanges set up today and that number is increasing all the time. All cryptocurrency exchanges are not created equal. Different exchanges let you buy and sell different cryptocurrencies; different exchanges set different prices for their listed cryptocurrencies; and different exchanges have different volumes of trades happening on them, which changes how easy it is to buy or sell cryptocurrency efficiently.
Ferrous Metals metals that contain iron. Ferrous metals include steel, stainless steel, pig iron, iron ore and iron oxide.
Fiat currency Any money declared by a government to be to be valid for meeting a financial obligation, like USD or EUR
Fill-or-Kill (FOK) Order A fill-or-kill (FOK) order is similar to an IOC order, except it cannot be partially filled: It must be filled in its entirety immediately; otherwise, it is cancelled. If you’re trying to execute a large order on multiple exchanges, this is a good way to test the order on all of those exchanges to see if it goes through, without needing to manually cancel the orders that aren’t immediately filled.
Flipping A type of investment strategy (popular in real estate investing) where you buy something with the goal of reselling for a profit later, usually in a short period of time. In the context of ICOs, flipping refers to the strategy of investing in tokens before they are listed on the exchanges and reselling them for a profit when they are trading in the secondary market.
FOMO Fear of missing out (“FOMO”) is modern slang for a timeless, irrational behaviour: worrying that you’re missing out on a great opportunity and therefore jumping into an investment. In the cryptocurrency space, otherwise inexplicable influxes of buyers have been attributed to FOMO.
fork Forks create an alternate version of the blockchain, leaving two blockchains to run simultaneously on different parts of the network.
Forward Contract non-standardized contract between two parties that establishes the price of a commodity to be delivered at a specific date in the future.
FUD Fear, uncertainty, and doubt (“FUD”) is modern slang for the “opposite” of FOMO: irrationally worrying that a particular investment or sector might collapse. In the cryptocurrency space, otherwise inexplicable sell-offs have been attributed to FUD.
Full node A full node is a node that fully enforces all of the rules of the blockchain
Fundamental Analysis (FA) Fundamental analysis (FA) is a trading strategy that emphasizes trading based on the intrinsic value of the asset. Traders consider a wide range of quantitative and qualitative data in an attempt to determine this intrinsic value. Especially in these early days of crypto, a lot of fundamental analysis amounts to trying to determine which cryptocurrencies have compelling long-term value propositions rather than being mere get-rich-quick schemes.
Future funds Usually limited partnerships for investors who prefer to participate in the futures market by buying shares in a fund managed by professional traders or commodity trading advisors.
Futures Contract A legally binding agreement, made on the trading floor of a futures exchange, to buy or sell a commodity or financial instrument sometime in the future. Futures contracts are standardized according to the quality, quantity, and delivery time and location.
Futures Exchange A central marketplace with established rules and regulations where buyers and sellers meet to trade futures and options on futures contracts.
Gap significant difference between the two consecutive quotes; may be shown on charts as a blank field between bars or candles when the time period between the two quotes covers the bars or candlestick’s close time.
Gas Gas is a unit of measuring the computational work of running transactions or smart contracts in the Ethereum network. This system is similar to the use of kilowatts (kW) for measuring electricity in your house; the electricity you use isn’t measured in dollars and cents but instead through kWH or Kilowatts per hour.
Gas limit Gas limit refers to the maximum amount of gas you’re willing to spend on a particular transaction. A higher gas limits mean that more computational work must be done to execute the smart contract. A standard ETH transfer requires a gas limit of 21,000 units of gas.
Gas price Gas price refers to an internal price that is paid for running a transaction or a contract on the Ethereum network.
Gasoline also known as petrol, is a liquid mixture obtained by the process of fractional distillation directly from crude oil.
Github GitHub is a web-based version-control and collaboration platform for software developers.
Going Long Going long on a cryptocurrency means that you’re buying it with the expectation of selling it at a higher price (without hedging). It doesn’t necessarily mean that you’ll be holding your position for a long time, though: Day traders “go long” when they buy a stock and sell it for a higher price an hour later.
Going short To go short on a currency means that you sell it, hoping for a decline in the market price. A short position is usually expressed in terms of the base currency.
Good till Canceled (GTC) An order worked by a broker until it can be filled or until canceled. (see Open Order)
Gorilla Trades Gorilla trade are designed for executing large trades without inadvertently moving the market. This method of trade finds the best way to execute a large order by only showing smaller pieces of it on the order book, preventing it from getting buried deep in the order book. It’s best used when there are medium levels of activity in the market.
Gwei Gwei is a denomination of ether (ETH), the cryptocoin used on the the Ethereum network.

1 Ether = 1,000,000,000 Gwei (109)
Haircutting When securities such as stocks and bonds are used as the investment margin, they are discounted at a percentage to determine their collateral value. Discounting these securities by a certain percentage to determine their margin value is referred to as haircutting.
hard cap A hard cap is the absolute upper limit a team will take in a fundrasing goal
Hard Commodities the ones extracted through mining. Those include precious metals (gold, silver, palladium, platinum), non-ferrous or base metals (aluminum, copper, lead, nickel, zinc), ferrous metals (iron ore, steel), minor metals (cobalt, molybdenum, magnesium, sylicon, titanium, etc.), rare earth metals (cerium, praseodymium, neodymium, promethium, terbium, dysprosium, etc.) and uranium.
hard fork A type of fork that renders previously invalid transactions valid, and vice versa. This type of fork requires all nodes and users to upgrade to the latest version of the protocol software.
Hardware Wallet A hardware wallet is a unit of security-audited hardware that stores your private keys and allows you to send, receive, and store cryptocurrency. They’re thought to be some of the most reliable, safest storage solutions available. At the moment, Trezor and Ledger are the leading hardware wallets out there.
Hashcash Hashcash is a proof-of-work system used to limit email spam and denial-of-service attacks, and more recently has become known for its use in bitcoin (and other cryptocurrencies) as part of the mining algorithm.
Hashrate is the number of hashes that can be performed by a bitcoin miner in a given period of time (usually a second).
Hedge The purchase or sale of a futures contract as a temporary substitute for a cash market transaction to be made at a later date. Usually it involves opposite positions in the cash market and futures market at the same time.
Hedging The practice of offsetting the price risk inherent in any cash market position by taking an equal but opposite position in the futures market. Hedgers use the futures markets to protect their businesses from adverse price changes. See Selling (Short) Hedge and Purchasing (Long) Hedge.
Hedging Hedging is an action you take to mitigate the risk of a trade. For example, if Bitcoin’s candlestick chart is suggesting that the market is very indecisive, and you think the price is about to go up, you might buy some more BTC while simultaneously shorting a correlated asset (e.g., ETH). Neglecting to hedge is one of the easiest ways to overexpose yourself to risk — especially if you’re day trading.
Henry Hub Natural Gas the pricing point for natural gas futures contracts traded on the NYMEX
High-Net-Worth Individual (HNWI) A high-net-worth individual (HNWI), broadly speaking, is a person who trades large enough amounts of an asset that the trades can move the market for that asset. HNWIs can be formally defined in a number of ways, but a common method of identifying them is seeing whether they qualify as an accredited investor: a person or entity who, according to the SEC under Regulation D, has a reduced need for the protection of regulatory disclosure filings due to this person or entity’s financial sophistication.
HODL The term “HODL” comes from when Bitcoin forum user GameKyuubi drunkenly misspelled that he was holding Bitcoin in December of 2013, despite its price crashing. HODL has become synonymous with the “trading” philosophy of buying Bitcoin (or other cryptocurrencies) and holding it indefinitely. The rationale behind this philosophy varies. Many who are entering the space with little trading experience believe that they will make more money in the long run by holding than they would by trying to catch the highs and lows of the market. Others — true Bitcoin maximalists, for example — believe that cryptocurrencies will ultimately replace fiat currencies, in which case it would be irrational to sell any cryptocurrency for fiat.
Hot Storage Hot storage is any kind of cryptocurrency wallet that is connected to the internet — for example, a web wallet or mobile wallet. They are typically thought to be the least safe wallets because they are susceptible to hacks, though they’re also usually easier to recover than cold-storage wallets if you forget your password — provided that the company providing the wallet also provides a password reset option.
Chaincode Chaincode is a program, written in Go, node.js, and eventually in other programming languages such as Java, that implements a prescribed interface.
Iceberg Order An iceberg order is a very large order that’s been divided into a large number of smaller limit orders in order to hide the overall quantity being bought or sold, with the hope of avoiding moving the market with your trade. It’s called an iceberg because the amount of crypto you see in the order is just the tip of the iceberg.
Immediate-or-Cancel (IOC) Order An immediate-or-cancel (IOC) order must be filled immediately, and any portion of it that cannot be filled immediately is cancelled. If you think the crypto market is just about to dip, and you want to get as much of your BTC stack as possible out right now, before the dip, this order type is a natural choice.
In the money In call options, when the strike price is below the price of the underlying futures. In put options, when the strike price is above the price of the underlying futures. In-the-money options are the most expensive options because the premium includes intrinsic value.
Index futures Futures contracts based on indexes such as the S&P 500 or Value Line Index. These are cash settlement contracts.
Initial coin offering (ICO) ICOs are types of crowdfunding mechanisms conducted on the blockchain. Originally, the main idea of an ICO was to fund new projects by pre-selling coins/tokens to investors interested in the project. Entrepreneurs present a whitepaper describing the business model and the technical specifications of a project before the ICO. They lay out a timeline for the project and set a target budget where they describe the future funds spending (marketing, R&D, etc.) as well as coin distribution (how many coins are they going to keep for themselves, token supply, etc.). During the crowdfunding campaign, investors purchase tokens with already established cryptocurrencies like Bitcoin and Ethereum.
Initial Margin The minimum value on deposit in your account to establish a new futures or options position, or to add to an existing position. Initial margin amount levels differ by contract. Lind-Waldock sets the level of Initial Margin required, and it may change at any time at Lind-Waldock’s discretion. Increases or decreases in Initial Margin levels reflect anticipated or actual changes in market volatility. Also called “Initial Performance Bond.”
Intrinsic value For in-the-money call and put options, the difference between the strike price and the underlying futures price.
Ledger is an append-only record store, where records are immutable and may hold more general information than financial records.
Leverage Leverage is the additional buying power created by margin trading, allowing you to effectively pay less than full price for an asset using borrowed funds. Leverage is typically represented as a ratio: for example, if you have $10,000 in a trading account and borrow another $10,000, then you have 2:1 leverage.
Lightning Network A low latency, off chain P2P system for making micropayments of cryptocurrencies. It offers features such as instant payments, scalability, low cost and cross-chain functionality. Participants do not have to make individual transactions public on the blockchain and security is enforced by smart contracts.
Limit Order A limit order is an agreement that you make with an exchange to execute a trade only at a certain price point or better. If that price point ends up never being reached, your order may never be executed. Limit orders also allow you to set a time limit on the order, after which the trade won’t be executed at all.
Liquid A characteristic of a security or commodity market with enough units outstanding to allow large transactions without a substantial change in price. Institutional investors are inclined to seek out liquid investments so that their trading activity will not influence the market price.
Liquidity Liquidity, roughly speaking, is a measure of how easy it is to convert an asset into cash quickly and without loss. The easier this is, the more liquid an asset is. One facilitator of liquidity in the cryptocurrency trading world is the presence of many different limit orders creating depth in an exchange’s order book.
Litecoin Litecoin (LTC) is a “clone” of Bitcoin released in 2011 by Charles Lee, but with a larger pool of total coins, shorter block processing times, and a different hashing algorithm. Lee believed that BTC was better suited to be a store of value, like gold, rather than a true currency. He created LTC to be the digital equivalent of silver: it’s in the same asset class as Bitcoin’s digital gold, but LTC is designed to be less valuable and easier to transact with.
MACD Moving average convergence divergence (MACD) is a trend-following momentum indicator that shows the relationship between two moving averages of prices. The MACD is calculated by subtracting the 26-day exponential moving average (EMA) from the 12-day EMA. A nine-day EMA of the MACD, called the “signal line”, is then plotted on top of the MACD, functioning as a trigger for buy and sell signals.
Margin Trading Margin trading is the practice of buying an asset using funds borrowed from a broker. This is a risky method of trading because, if the assets end up decreasing in value, the trader can be left in significant debt — it’s possible to lose more money than one initially invested.
Mark to Market The practice of crediting or debiting a trader’s account based on the daily closing prices of the futures contracts he is long or short.
Market cap Market Cap is the amount of Fiat money (USD, GBP etc) currently invested into a Cryptocurrency.
Market Makers Contrary to some increasingly common colloquial uses of the term, a “market maker” is not someone who is rich enough to move the entire market with their trades. Rather, a market maker is an entity who provides liquidity to an exchange by placing limit orders on its order book so that trades can be made at a range of prices. Many exchanges provide rebates to makers for this added liquidity.
Market Order A market order is what happens when you make an agreement with an exchange to buy or sell a certain amount of an asset immediately at the best available price. Depending on the size of your order and the trading volume on the exchange, this can end up giving you an extremely suboptimal price, though it allows you to execute your trade quickly.
Mining Mining is the act of validating blockchain transactions. The necessity of validation warrants an incentive for the miners, usually in the form of coins. In this cryptocurrency boom, mining can be a lucrative business when done properly. By choosing the most efficient and suitable hardware and mining target, mining can produce a stable form of passive income.
Moon In crypto slang, “moon” has multiple connotations. Most simply, a cryptocurrency going “to the moon” refers to its price skyrocketing, either in the short-term because of some kind of announcement/market sentiment, or in the long-term because of the cryptocurrency’s real value. “Moon lambos” are the lavish cars that some intend to buy once their crypto holdings go to the moon. They are not Lamborghinis that one drives on the moon. Sometimes, though, there’s also a bit of derisiveness behind the use of the term “moon”: It can be used to refer to people who are undereducated about the crypto space and are merely buying up coins with the expectation of making a quick, huge profit. This kind of subtle mockery is typically what’s happening when people post “when moon?” on crypto traders’ discussion forums.
Moving Average (MA) A moving average is a method used in technical analysis to smooth out smaller fluctuations in an asset’s price: It’s the average price of an asset over a number of periods of a given length. Moving averages come in different varieties, but the most common types are the exponential moving average, which determines the average price of an asset while giving more weight to more recent prices, and the simple moving average, which determines the average price of an asset without any time bias.
Multi Signature Multi-signature addresses provide an added layer of security by requiring more than one key to authorize a transaction.
Multi-signature (multisig) Multi-signature (multisig) addresses allow multiple parties to require more than one key to authorize a transaction. The needed number of signatures is agreed at the creation of the address. Multi signature addresses have a much greater resistance to theft.
Multisignature (Multisig) Multisignature (multisig) refers to cryptocurrency transactions that require more than one signature to be approved. This has lots of applications, but its primary utility when it comes to trading is 2-factor authentication: If you have 2FA enabled, then each “factor” — e.g., your password and U2F — is a signature that’s required before your trade can be executed.
Natural Gas gas composed mainly by methane.
Node A node is any computer that connects to the blockchain network.
OTC Trades Over-the-counter (‘OTC’) trades are how many high-net-worth individuals and institutional investors make their especially large trades: they use a broker who directly connects them with an entity willing to buy or sell the asset in question at a particular price. This is intended to avoid losing money by executing a trade so large that it moves the market.
Out-of-the-money Option calls with strike prices above the price of the underlying futures, and puts with strike prices below the price of the underlying futures.
Over The Counter (OTC) describes any transaction that is not conducted via an exchange.
Paper Wallet A paper wallet — named such because it is often literally printed on a piece of paper — is a cryptocurrency wallet generated by a site like bitcoinpaperwallet.com. It’s a combination of a private key and public key that’s totally offline, making it secure against theft but also virtually impossible to recover if lost.
Peer to Peer Peer to Peer (P2P) refers to the decentralized interactions between two parties or more in a highly-interconnected network. Participants of a P2P network deal directly with each other through a single mediation point.
Penny-jumping Penny-jumping is a strategy used to front-run large orders, typically executed by trading bots. For example, if a trader issues a large BTC buy limit order at $5,000 per coin, then the bot may place an order at $5,000.01. If the price of BTC goes down, it sells back to the big buy order. But if the price of BTC rises, the bot’s order fills above the big order on the order book and can sell at a profit if the big order is re-entered at a higher price.
Pit An octagonal platform on the trading floor of an exchange, consisting of steps upon which traders and brokers stand while trading (If circular. called a “ring”).
Polar Bear Trades Polar bear trades are designed to optimize the price on large orders. It is a hidden order that automatically trades on the top of an order book once a set limit price is reached. It’s best used with thin spreads and small quantities on the top of the order book.
Pool As part of bitcoin mining, mining “pools” are a network of miners that work together to mine a block, then split the block reward among the pool miners. Mining pools are a good way for miners to combine their resources to increase the probability of mining a block, and also contribute to the overall health and decentralization of the bitcoin network.
Position A market commitment. A buyer of an initial futures contract is said to have a long position and, conversely, a seller of an initial futures contract is said to have a short position.
Post-Only Order Post-only orders are something like the opposite of an FOK order: They are accepted only if they do not immediately execute. This prevents the order from taking liquidity out of the market, and it typically allows traders to earn some kind of rebate or fee associated with acting as a market maker.
Pre-sale A sale that takes place before an ICO is made available to the general public to participate.
Precious Metals rare naturally-occurring elements of high economic value. This category includes gold, silver, platinum and palladium.
Premium The market value of a coin less the intrinsic value of its metal content.
Private Key A private key is a string of data that allows you to access the tokens in a specific wallet. They act as passwords that are kept hidden from anyone but the owner of the address.
Proof of Authority is a consensus mechanism in a private blockchain which essentially gives one client (or a specific number of clients) with one particular private key the right to make all of the blocks in the blockchain
Proof of Stake (PoS) A consensus distribution algorithm that rewards earnings based on the number of coins you own or hold. The more you invest in the coin, the more you gain by mining with this protocol.
proof of Work (PoW) A consensus distribution algorithm that requires an active role in mining data blocks, often consuming resources, such as electricity. The more ‘work’ you do or the more computational power you provide, the more coins you are rewarded with.
Protocols sets of formal rules describing how to transmit or exchange data, especially across a network
Public Address A public address is the cryptographic hash of a public key. They act as email addresses that can be published anywhere, unlike private keys.
Pump and Dump Pump and dump is a scheme that attempts to boost the price of a stock through recommendations based on false, misleading or greatly exaggerated statements. The perpetrators of this scheme, who already have an established position in the company’s stock, sell their positions after the hype has led to a higher share price. This practice is illegal based on securities law and can lead to heavy fines.
put In options. the buyer of a put has the right to acquire a short position in the underlying futures contract at the strike price until the option expires; the seller (writer) of the put obligates himself to take a long position in the futures at the strike price if the buyer exercises his put.
Put Options A put option is a contract that gives its holder the right (not the obligation) to sell a specific amount of a given asset within a certain time frame. As the underlying asset depreciates in value, the put option itself appreciates; therefore, buying put options on an asset like BTC is a method of shorting it.
Rally fast buying of securities (stock, bonds) or derivatives (commodities) when the value of the asset is expected to increase
Ratio hedging Hedging a cash position with futures on a less or more than one-for-one basis.
Resistance Resistance, typically mentioned in reference to technical analysis, is a price level at which the selling pressure on an asset is historically greater than the buying pressure, meaning that the asset encounters “resistance” from the market when it attempts to break through that price level. One basic tactic of day trading is shorting an asset when the asset is nearing a resistance level and the trader expects it won’t break through the resistance level. Once an asset does break through a resistance level, that level often turns into a support level.
Return on Investment (ROI) The ROI, typically expressed as a percent, is a measure of the efficiency of an investment.
Risk On, Risk Off (RoRo) Risk on, risk off (RoRo) trading is a style of trading according to which you modulate your risk appetite in response to the perceived level of risk in the overall market or economy: When the general cryptocurrency market seems especially risky, you make (relatively) less risky investments (e.g., holding Bitcoin); when the general cryptocurrency market seems less risky, you make (relatively) riskier investments (e.g., trading other tokens).
ROI Return on investment (ROI) measures the gain or loss generated on an investment relative to the amount of money invested. ROI is usually expressed as a percentage and is typically used for personal financial decisions, to compare a company’s profitability or to compare the efficiency of different investments.
Round turn The execution for the same customer of a purchase transaction and a sales transaction which offset each other.
Round-turn Commission The cost to the customer for executing a futures contract which is charged only when the position is liquidated.
Scalping For floor traders, the practice of trading in and out of contracts throughout the trading day in hopes of making a series of small profits.
Segregated Witness (SegWit) The process where the block size limit on a blockchain is increased by removing digital signature data and moving it to the end of a transaction to free up capacity. Transactions are essentially split (or ‘segregated’), into two segments: the original data segment and the signature (or ‘witness’) segment.
Sell Wall A group of high-net-worth individuals (HNWIs) all want to buy a particular cryptocurrency, but they don’t want to move the market with a large order because that will end up making them pay a premium for their trade. Therefore, each member of the group buys only a small fraction of the position they ultimately want to take (e.g., 100,000 of the cryptocurrency rather than 500,000), and then they all simultaneously flood the market with under-priced sell orders. A group of high-net-worth individuals (HNWIs) all want to buy a particular cryptocurrency, but they don’t want to move the market with a large order because that will end up making them pay a premium for their trade. Therefore, each member of the group buys only a small fraction of the position they ultimately want to take (e.g., 100,000 of the cryptocurrency rather than 500,000), and then they all simultaneously flood the market with under-priced sell orders.
Settlement Price The last price paid for a commodity on any trading day. The exchange clearinghouse determines a firm’s net gains or losses, margin requirements, and the next day’s price limits, based on each futures and options contract settlement price. If there is a closing range of prices, the settlement price is determined by averaging those prices. Also referred to as Settle or Closing Price. Thinly traded options may be traded at a theoretical value.
Shilling Similar to the pump-and-dump strategy, shilling refers to the act of disingenuously spreading potentially false news about an asset in which one has a vested interest.
Slippage Slippage refers to the difference between the price at which a trader expects a trade to execute and the price at which it actually executes. There are a number of reasons why slippage would occur — for instance, if a trader places a market order when the market is especially volatile, or when a trader places a trade large enough to move the market. Imagine a situation in which the top-of-the-order-book price of Bitcoin is $8100 USD and you’re hoping to buy 100 BTC. Chances are good that there won’t be enough volume near the top of the order book to actually let you buy that much BTC at $8100 USD per coin: instead: you’ll end up needing to go deep into the order book to fill your order, meaning you’ll end up paying more than you expected — maybe up as high as $8200 or $8300. Worse, if you telegraph your large order to other traders and bots on the exchange, they might recognize the buying pressure and drive up the price of BTC even more as you’re trying to buy it. These are two classic examples of slippage in action.
Smart contract Smart contracts encode business rules in a programmable language onto the blockchain and are enforced by the participants of the network.
Smart Routing A smart order router is a software program that uses algorithms to maximize trading profits by picking the best opportunities on different exchanges.
Sniper Trades Sniper trades are a hidden order optimized for speed. This algorithm is ideal for getting the best possible price on a large order quickly, as you would want to do when the markets are especially volatile and you’re worried about prices dropping drastically.
Soft cap A soft cap is typically a lower limit, more like how much a team is aiming to raise
Soft Commodities goods that are grown. Exchange-traded soft commodities include sugar, coffee, cotton, cocoa, and orange juice.
Speculator One who attempts to anticipate price changes and, through buying and selling futures contracts, aims to make profits. A speculator does not use the futures market in connection with the production, processing, marketing or handling of a product.
Spot Market of immediate delivery of and payment for the product.
Spread The price difference between two related markets or commodities.
stable coin “Stable coin” is a term used in cryptocurrency to describe cryptocurrencies meant to hold stable values.
Stable Coin Stable coins are cryptocurrencies intended to maintain a stable price and value, in contrast to the other extremely volatile cryptocurrencies. Tether, for instance, is a project that issues tokens with value pegged to particular fiat currencies — for example, the USDT, a token designed to always be worth $1 USD.
Stop Limit A variation of a stop order. A stop with limit order to buy becomes a limit order at the stop price when the futures contract trades (or is bid) at or above the stop price. A stop order to sell becomes a limit order at the stop price when the futures contract trades (or is offered) at or below the stop price. This is an Order Type in LindConnect for some contracts.
Stop-Loss order A stop-loss order is a trade that you put in place for an exchange to immediately execute if an asset reaches a particular price point. As the name suggests, this kind of order is designed to limit your losses: if you’re invested in Bitcoin and want to make sure you don’t lose too much money in the event of it tanking, you can make a stop-loss order to ensure that your Bitcoin will be sold immediately if the price dips below a certain point.
Support A support is typically discussed in terms of technical analysis: It’s a price level at which the buying pressure on an asset is historically greater than the selling pressure, meaning the asset encounters “support” when its price attempts to dip lower than that level. A basic method when attempting to secure profit, especially in a volatile market like crypto, is to buy into a cryptoasset when it’s around a level of support and the trader expects that the support will hold. Once an asset does break through a support level, that level often turns into a resistance level.
Swing Trading Swing trading is the strategy of buying an asset at a low price and selling it at a high price at a relatively high frequency — typically once a day or once every few days. The high volatility of many cryptocurrencies has led many traders to focus on this kind of strategy, though that high volatility can also make the strategy costly if you time your trades poorly.
Take-Profit Order A take-profit order is the “other half” of a stop-loss order: whereas a stop-loss order is put in place to limit one’s losses, a take-profit order is put in place to secure one’s profits. When this kind of limit order is put in place with an exchange, you will automatically sell the asset in question, immediately, if its value reaches a certain price.
Technical Analysis (TA) Technical analysis (TA) is a trading strategy that emphasizes using mathematical patterns and indicators to predict where an asset’s price will go in the future. Some focus on TA to the exclusion of all else, reading charts without reading any actual market news, though this isn’t recommended.
Tick Smallest increment of price movement possible in trading a given contract.
Token A token, similar to a token in a kid’s arcade, is a digital unit designed to provide access to a system. Tokens, unlike coins and currency, are not designed as a store of value instead they have programmable potential built in. A to
ken is also known as a “crypto asset”.

Tokens are often confused with coins and cryptocurrency, and while people may trade them with others hoping their value will increase, tokens were not designed as a store of value. Instead, tokens are designed so programmers can build software around or in them and users can interact with the software using the tokens.

Some tokens like Ethereum were built so that other cryptocurrencies and tokens could be built on top of them. OMG is a cryptocurrency built on the token, Ethereum. There are games and productivity apps also built using Ethereum’s token.
Troy Ounce the traditional unit weight for precious metals, believed to be named after a weight used at the annual fair at Troyes in France in the Middle Ages. 1 troy ounce = 31.1034768 grams
TWAP Trades Time-weighted average price (‘TWAP’) trades are like a more sophisticated method of dollar-cost averaging. These trades allow you to specify n, t, and p such that you buy or sell n of a cryptocurrency over t hours for an average price of p.
Universal 2-Factor (U2F) A universal 2-factor (U2F) is a sort of specialized, encrypted USB drive that you insert into your computer as a method of 2-factor authentication. At the moment, YubiKey is one of the leading U2Fs available.
Value at Risk (VaR) Value at risk (VaR) is a statistical method of measuring a portfolio’s risk: It’s the maximum amount of value that one could expect to lose over a given time horizon. For example, if your crypto portfolio has a “95% 2-week VaR of $100,000 USD,” that means that there is 95% confidence, statistically speaking, that your portfolio will not lose more than $100,000 USD of value over the next two weeks.
Volatility Volatility is the size of changes in an asset’s value over time. If an asset’s value frequently fluctuates to a great degree — that is, if it’s highly volatile — then it’s typically thought to be a proportionately high-risk investment. The historically high volatility of Bitcoin is one of the reasons why some have been sceptical of Bitcoin’s capacity to act as a store of value. Volatility is also what gives traders the opportunity to profit through day trading and swing trading (see below).
Wallets When it comes to managing your cryptocurrency holdings, it’s important to understand who actually has your holdings. If you have your holdings in a wallet — whether that’s a hardware wallet, a software wallet, or a paper wallet — you control your private key and actually have custody over those holdings. On the other hand, when you buy and hold cryptocurrencies on most exchanges, they store those holdings in wallets of their own. That’s why some people worry about centralized cryptocurrency exchanges: if they’re hacked, their investors’ money could vanish overnight.
Western Texas Intermediate known as Texas light sweet, is a light crude oil low in wax and sulphur content which makes it light and sweet.
Whale “Whale” is a colloquial term for the biggest players in the cryptocurrency trading game — these include not only HNWIs but also large institutional investors, such as hedge funds. It’s thought that whales are often responsible for atypical market phenomena, such as buy walls and sell walls.
Whitelist A list of registered and approved participants that are given exclusive access to contribute to an ICO or a pre-sale.
Whitepaper a Whitepaper in cryptos is prepared by a party prior to launching a new currency. It details everything you need to know about the currency before making up your mind if you want to invest, purchase or use it. This includes commercial, technological and financial details of a new coin in language that can be understood by someone who is not an expert in the space.