Glossary

Trading Glossary: Zarosโ€™ trading features

In this section, you will explore several of the trading features and tools that will be eventually offered by Zaros, while also providing explanations for those who may be less familiar with perpetual futures trading.

Order TypeDefinition

Leverage

The use of borrowed funds to increase the potential return of an investment.

Liquidation

The process of closing a position in futures trading when the market moves against it beyond a set threshold, preventing further losses.

Cross Margin

A trading approach allowing the use of all account funds as collateral, potentially affecting multiple positions simultaneously.

Isolated Margin

A trading strategy where the margin is limited to a specific position, isolating its risk from other trades.

Limit Order

An instruction to buy or sell an asset at a specific price or better, giving traders the flexibility to target precise market levels.

Market Order

A request to buy or sell an asset immediately at the current market price, offering rapid execution but with the risk of price fluctuations.

Take Profit (TP)

An order to sell a security when it reaches a predetermined price, locking in profits.

Stop Loss (SL)

An order to sell a security when it reaches a certain price, limiting potential losses.

Funding Rate

A mechanism in perpetual markets that facilitates cash exchanges between long and short position holders to ensure the alignment of perpetual contract prices with those of the underlying assets.

Trailing Stop Order

Tracks the movement of an asset upwards, adjusting the stop price automatically to secure profits while allowing for potential price gains.

TWAP Order

The TWAP (Time Weighted Average Price) Order enables traders to execute large orders over a specific time period, distributing trades evenly to minimize market impact.

Cascade Effect

A phenomenon where the liquidation of one position in a cross-margin setup can impact all other positions.

Slippage

The difference between the expected price of a trade and the price at which the trade is actually executed, often occurring during periods of high volatility.

eCluster Mechanism

A proprietary mechanism used by Zaros to evaluate and categorize assets into Risk Tiers based on various factors, and define some of the system's configurable parameters.

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