Glossary
01
Basics
TickerA ticker is the short code that identifies something you can trade. SPY is a fund that tracks the S&P 500. BTC is Bitcoin.
ETFAn exchange-traded fund holds many assets and trades on an exchange like one stock. Buying one share of SPY buys a small slice of all 500 companies in the S&P 500.
Spot priceSpot is the current price of the real asset for immediate delivery, as opposed to the price of a contract based on it. · see mark-priceperpetual
LongBeing long means you own the asset, or hold a contract that gains when its price rises. · see short
ShortBeing short means you hold a position that gains when the price falls. With contracts this is as easy as going long. Losses on a short are not capped, because a price can keep rising. · see longshort-covering
LeverageLeverage means borrowing to make a position bigger than your own money allows. At 5x, a 1% price move changes your money by 5%. It multiplies losses exactly as much as gains. · see marginliquidation
MarginMargin is the collateral a trader puts up to open and keep a leveraged position. If losses eat through it, the position is closed by force. · see leverageliquidation
LiquidationWhen a leveraged trader's losses use up their margin, the exchange closes the position automatically. A liquidated long is a forced sale. A liquidated short is a forced purchase. · see liquidation-priceliquidation-levelslong-liquidation
Liquidation priceEach leveraged position has a price at which its margin is gone. More leverage puts that price closer to where the trader entered. · see liquidation
Notional valueNotional is the total value a position controls, not the money posted to hold it. $1,000 of margin at 5x is $5,000 notional.
VolumeVolume adds up the value of every trade in a period. It measures activity, not direction: every trade has a buyer and a seller. · see open-interestturnover
Basis pointBasis points are the unit for small percentage changes, mostly in interest rates. A 25bp rate hike raises the rate by 0.25 percentage points.
AnnualisedAnnualising converts a rate measured over a short period into a yearly figure so different things can be compared. An hourly fee of 0.002% is about 17.5% annualised.
PercentileThe 96th percentile means today's reading is higher than 96% of the readings we have on record. It says how unusual a number is, not whether it is good or bad.
YTDYTD is the return from the first trading day of the calendar year to now.
02
Perpetual contracts
Perpetual contractA perpetual contract, or perp, lets traders bet on a price without owning the asset. Unlike a traditional futures contract it never expires. A funding payment between longs and shorts keeps its price close to the real one. · see funding-ratemark-priceopen-interest
Mark priceThe mark price is the exchange's estimate of a contract's fair value, built to resist brief spikes. Profit, loss and liquidations are calculated from it rather than from the last trade. · see oracle-pricepremium
Oracle priceThe oracle price is the asset's spot price, averaged from major exchanges and reported to the perp exchange. It is the reference a perp is supposed to track. · see mark-pricepremium
Funding rateWhen a perp trades above the real price, longs pay shorts. When it trades below, shorts pay longs. On Hyperliquid this is paid every hour. The fee pulls the perp back toward the real price. · see excess-fundingcrowd-leanpremium
Excess fundingHyperliquid's funding formula includes a fixed interest baseline of about 11% a year that longs pay in a balanced market. Excess funding subtracts that baseline, so what is left reflects trader demand only. · see funding-rate
Open interestOpen interest counts positions that have been opened and not yet closed. Every contract has one long and one short, so open interest is not bullish or bearish on its own. · see flowvolumeturnover
TurnoverTurnover shows how much of the standing pile of positions changes hands in a day. A reading of 0.18x means a day's trading equals 18% of open interest. · see volumeopen-interestpercentile
Flow (price and open interest)Reading price and open interest together gives four cases. The names are standard market terms. · see new-longsshort-coveringnew-shortslong-liquidation
New longsThe price rose while the number of open contracts grew, so the move was driven by traders opening new long positions. · see flow
Short coveringThe price rose while open contracts shrank, so the move was driven by short sellers closing out rather than by new buyers. · see flowshort
New shortsThe price fell while the number of open contracts grew, so the move was driven by traders opening new short positions. · see flow
Long liquidationThe price fell while open contracts shrank, so the move was driven by long positions being closed, by choice or by force. · see flowliquidation
HIP-3 marketsHIP-3 is the Hyperliquid rule that lets third parties launch their own perp markets. It is why a crypto exchange lists contracts on gold, oil, the S&P 500 and single stocks.
Token unlockMany crypto projects lock tokens held by the team and early investors and release them on a schedule. An unlock adds to the supply that can be sold.
03
Reading a market
52-week rangeThe 52-week range is the span between an instrument's lowest and highest price over the past year. Where today's price sits inside it shows, at a glance, whether the instrument is near its high or its low. · see range-read
Moving averageA moving average smooths out daily noise. The 200-day moving average is the most watched long-term version: a price above it is commonly described as being in a long-term uptrend. · see breadth
Market breadthBreadth measures participation. An index can rise because a few giant companies rise while most others fall. Breadth shows whether the move is wide or narrow. · see moving-averagesector
Relative strengthRelative strength compares one instrument's return with a benchmark's over the same period. It is a comparison, and is not the same thing as the RSI indicator. · see sp500
SectorThe stock market is conventionally split into eleven sectors, such as Technology, Energy and Health Care. Each has an ETF, which makes sectors easy to compare.
VolatilityVolatility measures the size of price swings, usually as an annualised percentage. Realised volatility looks at what already happened. Implied volatility is what option prices expect. · see implied-volatilityvix
VIXThe VIX is calculated from S&P 500 option prices. It rises when traders pay up for protection, which is why it is often called the fear gauge. · see implied-volatilitydvol
DrawdownDrawdown is how far something has fallen from its previous high, as a percentage. It is the most honest measure of how painful holding it has been.
S&P 500The S&P 500 weights companies by size, so the largest few have an outsized effect. SPY is the most traded fund that tracks it. · see equal-weight
Equal weightAn equal-weight index gives each company the same share instead of weighting by size. Comparing it with the normal index shows whether the giants or the typical company are driving returns. RSP is the equal-weight S&P 500 fund. · see sp500breadth
Nasdaq 100QQQ is the fund that tracks it.
Russell 2000Small companies are more sensitive to borrowing costs and the domestic economy. IWM is the fund that tracks it.
Growth and valueGrowth stocks are priced on expected future earnings. Value stocks trade at low prices relative to current earnings or assets. IWF and IWD are funds for each.
Dollar IndexA rising dollar index means the dollar is strengthening against the euro, yen, pound and others. A strong dollar tends to weigh on commodities and non-US assets priced in dollars.
TreasuriesBond prices move opposite to interest rates: when rates rise, existing bonds fall in price. Long-dated bonds move the most. TLT is a fund of Treasuries with 20 or more years to run.
High yield bondsHigh yield bonds pay more because the chance of default is higher. They tend to fall when investors worry about the economy, which makes them a useful stress signal. JNK is a fund that holds them.
WTI and BrentWTI is the US benchmark. Brent is the international one. Brent usually trades a few dollars above WTI.
FOMCThe Federal Open Market Committee decides the target for short-term US interest rates. Its meetings are the most watched scheduled events in markets. · see basis-point
04
Options
OptionA call is the right to buy. A put is the right to sell. The buyer pays a price up front, called the premium, and can lose no more than that. · see strikeexpiryimplied-volatility
Strike priceA call with a $90,000 strike gives the right to buy at $90,000 whatever the market price is. · see option
ExpiryAfter expiry the option no longer exists. On Deribit a code like 25SEP26 means the option expires on 25 September 2026. · see option
At the moneyAt-the-money options are the standard reference point for quoting implied volatility. · see strike
Implied volatilityOption prices rise when traders expect bigger moves. Implied volatility works backwards from the option's price to the expected swing, as an annualised percentage. · see dvolvixvolatility
DVOLDVOL is to Bitcoin what the VIX is to the S&P 500. It is an annualised percentage. · see implied-volatilityvix
DeltaDelta is also used as a rough label for how far an option is from the current price. A 25-delta option is moderately far away, with roughly a one in four chance of paying off. · see risk-reversal
Risk reversalThe 25-delta risk reversal is the implied volatility of a 25-delta call minus that of a 25-delta put. Negative means puts cost more, so traders are paying more for protection than for upside. · see deltaimplied-volatility
Max painMax pain is calculated from open option positions. Some traders believe price drifts toward it as expiry nears, because option sellers hedge. The evidence for that is mixed. · see expiryopen-interest
05
How we test ideas
Base rateBefore trusting a pattern, ask how often it actually worked. If a setup was followed by a rise 7 times out of 10, its base rate is 70%. · see hit-rateepisode
Hit rateA hit rate near 50% means a coin flip. A high hit rate with small wins and rare large losses can still lose money, so it is always read beside the average result. · see base-rate
EpisodeA condition that stays true for five days in a row is one episode, not five pieces of evidence. We count episodes so a single long stretch cannot pass for many confirmations. · see base-rate
BacktestA backtest shows how a rule would have done historically. It is easy to fool yourself with one, because rules can be tuned until the past looks good. · see forward-test
Forward testA forward test fixes the rule first and then watches what happens. It is slower than a backtest and much harder to fool. · see backtest
Correlation+1 means they move in lockstep, 0 means no relationship, -1 means they move opposite. Correlation does not show which one causes the other.
Unrealised profit and lossUnrealised profit exists on paper and changes with the price. It becomes realised when the position is closed.
06
Our terms
CHEAP / FAIR / RICHCHEAP means the price is in the bottom 40% of its 52-week range. FAIR is 40% to 80%. RICH is the top 20%. It describes position in a range and nothing else. · see 52-week-range
Smart cohortWe take Hyperliquid's public leaderboard and keep wallets with at least $100,000, at least $1M traded this month, and profit over the week, month and all time. The top 60 by monthly profit are the cohort. The list is rebuilt on every run. · see cohort-leanroster-retainedcohort-loading
Cohort leanNet dollars long minus short, divided by total dollars in positions. Words on the dashboard: HEAVILY SHORT under -0.6, NET SHORT under -0.2, BALANCED to +0.2, NET LONG to +0.6, HEAVILY LONG above. · see smart-cohortdollars-vs-heads
Crowd leanEvery perp has exactly as many longs as shorts, so there is no true long-to-short ratio. What can be measured is which side is paying to hold its position. We blend excess funding and premium into one number. Positive means longs are the eager side. · see funding-ratepremiumexcess-funding
Contrarian flagRaised when the cohort leans one way by at least 0.33, the crowd leans the other way by at least 0.15, at least two cohort wallets are involved and their positions total at least $2M. · see smart-cohortcrowd-lean
Cohort loadingThe sum of every cohort position in dollars, shown as a percentile. High means the group is fully invested. Low means it has pulled back. · see smart-cohortpercentile
Roster retainedBecause the list is rebuilt from recent profit, it can change a lot. When few wallets carry over, a change in the cohort's lean mostly reflects different people being selected, not the same people changing their minds. · see smart-cohort
Dollars versus head countDollar lean weights each trader by position size. Head count gives each trader one vote. When they disagree, a few large wallets are positioned against many small ones. · see cohort-lean
Liquidation gravityFor each cohort position we read the liquidation price the exchange reports and group nearby ones into clusters. Clusters below the current price are forced selling if reached. Clusters above are forced buying. · see liquidationliquidation-price
HYPE churnThe same measure as turnover: 24-hour volume divided by open interest. · see turnover
ReadA Read restates a number as a plain word using fixed thresholds, such as NARROW for breadth or QUIET for turnover. It describes. It is not a recommendation.