Derivatives

Funding rate, open interest, liquidations, perpetual swaps — the futures market explained.

Guides (1)

Understanding Funding Rate — How Perp Sentiment Works

Funding rate is the cleanest sentiment gauge in crypto. Here is what it is, how to read it, and how to avoid becoming the exit liquidity for a funding squeeze.

2 min read

Glossary (5)

GlossaryDerivatives

Funding Rate

Periodic payment between long and short traders on perpetual futures. Keeps the perp price tied to spot.

1 min read

GlossaryDerivatives

Liquidation

Forced closure of a leveraged position when margin falls below the maintenance requirement.

1 min read

GlossaryDerivatives

Open Interest

Total notional value of outstanding derivatives contracts. Grows when new positions open, shrinks when positions close.

1 min read

GlossaryDerivatives

Perpetual Swap

Futures contract with no expiry. Tracks spot via a periodic funding payment between longs and shorts.

1 min read

GlossaryDerivatives

Taker Flow — Buy vs Sell Pressure

Net aggressive buying vs selling from market takers — who is willing to pay the spread right now, longs or shorts.

2 min read