Glossary
Long Position
A long means you expect the price of a coin to rise.
For example, if Bitcoin is at $110,000 and you believe it will go higher, you open a long position. If the price goes up, you make a profit.
Short Position
A short means you expect the price of a coin to fall.
For example, if Ethereum is at $3,500 and you believe it will drop, you open a short position. If the price goes down, you make a profit.
Leverage
Leverage allows you to trade with more capital than you actually have. It works like borrowing from the exchange.
For instance, with $200 and 10x leverage, you control a $2,000 position. Profits increase, but so do losses.
Margin
Margin is the collateral you put up to support a leveraged position.
Cross margin: your entire balance in the Perps wallet is used to back all open trades. This gives trades more flexibility but also means one losing trade can affect your whole wallet balance.
Isolated margin: only the amount you assign to one specific trade is at risk, while the rest of your balance stays safe. This model allows tighter control of risk per trade.
At the moment, Blum Perps support only cross margin.
Liquidation
Liquidation happens when your trade goes against you so much that your margin is no longer enough to cover losses. The position is automatically closed, and you lose the margin you placed on that trade.
The condition for liquidation is when Equity ≤ Maintenance Margin – meaning your remaining balance in the Perps wallet is equal to or lower than the minimum required to keep the position open.
Funding Rate
A small fee exchanged between long and short traders to keep the price of the Perpetual Futures contract close to the real spot market price.
If most traders are long, they pay a fee to shorts. If most are short, they pay longs. Funding is usually charged or paid every 8 hours.
Profit and Loss (PnL)
PnL shows how much money you have made or lost on an open position. It updates in real time as the price moves.
For example, if you open a $1,000 Bitcoin trade and the position value rises to $1,200, your PnL is $200 profit.
Stop Loss
A stop loss is an order that automatically closes your trade if the price moves too far against you. It helps limit your losses.
For example, if you open an Ethereum long at $3,500 and set a stop loss at $3,400, your position closes automatically if the price drops to $3,400.
Take Profit
A take profit is an order that automatically closes your trade when the price reaches your chosen target.
For example, if you long Bitcoin at $110,000 and set a take profit at $114,000, your trade closes automatically when Bitcoin hits $114,000, securing your profit.
Position
A position is simply your active trade. It can be a long or a short, and it shows your entry price, trade size, margin used, and your current profit or loss.
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