Independent educational resource
Trading glossary
Key terms used throughout our guides.
Notional exposure and collateral
Notional exposure is the reference value of a position. Collateral is the value supporting it. They are not interchangeable: a leveraged position can have notional exposure much larger than its collateral.
Spread and slippage
The spread is the gap between available buying and selling prices. Slippage is the difference between an expected price and the execution achieved. Both can increase when liquidity becomes scarce.
Funding and liquidation
Funding is a periodic or continuous payment mechanism under a perpetual market’s rules. Liquidation is the reduction or closure of exposure when applicable collateral requirements are not met.
Oracle and smart contract
An oracle supplies external data used by a system. A smart contract is code executed within blockchain infrastructure. Neither term, by itself, guarantees accurate data, secure code or a particular legal remedy.