Glossaries you need to know
Time to learn about options terms
A
Airdrop
In the cryptocurrency industry, an airdrop is a marketing stunt in which money or tokens are sent to wallet addresses in order to raise awareness of a new virtual currency.
Small amounts of the new virtual money are distributed for free or in exchange for a small service, such as retweeting a message sent by the company providing the currency.
Alcoin (Alternative Bitcoin)
Altcoins are all cryptocurrencies other than Bitcoin (BTC). However, some people consider altcoins to be all cryptocurrencies other than Bitcoin and Ethereum (ETH), because most cryptocurrencies are forked from one of the two. Some altcoins utilize distinct consensus mechanisms to validate transactions and open new blocks, while others try to differentiate themselves from Bitcoin and Ethereum by offering new or additional capabilities or purposes.
Most altcoins are produced and launched by developers that have a different vision or usage for their tokens or currencies.
ATH (All time high)
The term “All-Time High” (ATH) refers to the greatest price (or market cap) attained by an asset since its listing or commencement. Because the price used to determine the “all-time high” is the most recent, it simply refers to the highest price a trader paid for an asset, regardless of how much of the asset he purchased.
The all-time high is frequently referenced in financial assets around the world because it represents the asset’s “theoretical potential.” However, there is no assurance that the asset will trade back to its all-time highs, and this indicator is sometimes referred to as a vanity metric.
For example: ETH’s all-time high is $4,878.26.
Algorithmic Stablecoin
An algorithmic stablecoin is aimed to ensure price stability as well as balance the circulating supply of an asset by being tied to a reserve asset such as the US dollar, gold, or any foreign currency.
In other words, an algorithmic stablecoin uses an algorithm that can issue more coins when the price rises and purchase them off the market when the price falls.
These coins provide traders with the security of enjoying many of the benefits of crypto assets such as ETH and BTC without the risk of excessive price volatility.
Aggregator
Aggregator (or Crypto Aggregators) enable you to integrate cryptocurrency trade data from the largest exchanges into a single real-time pricing feed. It combines trading from many decentralized finance networks into a single platform.
Many brokers and crypto-instruments can be linked on a single platform with the help of a cryptocurrency aggregator, allowing a larger population to get access to the cryptocurrency market.
These aggregators collect data from several DEXs and CEXs on a single platform by utilizing dApps, smart contracts, oracles, and APIs. To discover the best price for an asset, traders do not need to switch across exchanges.
AMM (Automated Market Maker)
Automated Market Maker (AMM) enables digital assets to be traded without authorization and automatically by utilizing liquidity pools rather than a traditional market of buyers and sellers. On a standard exchange platform, buyers and sellers offer various prices for an object. When other users find a listed price acceptable, they make a deal, and that price becomes the asset’s market price. This classic market structure is used for trading stocks, gold, real estate, and most other assets. AMMs, on the other hand, take a different approach to asset trading.
AMMs are a type of financial instrument that is specific to Ethereum and decentralized finance (DeFi). This new technology is decentralized, constantly open for trading, and does not rely on traditional buyer-seller interactions. This innovative method of trading assets represents the ideas of Ethereum, crypto, and blockchain technology in general: no single entity controls the system, and anybody may design and participate in new solutions.
Address
A cryptocurrency address is a unique set of characters or figures that indicates a wallet and is used to send and receive cryptocurrencies. An address identifies the location of a certain wallet on the blockchain. And most addresses are intended to be used only once to accept or transmit crypto.
AML
The web of rules, regulations, and procedures aimed at identifying attempts to disguise criminal funds as lawful revenue is referred to as Anti-Money Laundering (AML). Money laundering aims to conceal crimes ranging from minor tax evasion and drug trafficking to public corruption and the funding of terrorist organizations.
ASIC MINER
An application-specific integrated circuit (ASIC) is a specialized integrated circuit chip. An ASIC miner is a computational device or hardware that only employs ASICs to “mine” digital currency. Each ASIC miner is typically designed to mine a certain digital currency. As a result, a Bitcoin ASIC miner can only mine bitcoins. Bitcoin ASICs can be thought of as customized bitcoin mining machines, or “bitcoin generators,” optimized to solve the mining algorithm.
ASHDRAKED
Being Ashdraked is just a more thorough form of being Zhoutonged. It is when you lose all of your invested capital, but you do so deliberately by shorting Bitcoin. The term “Ashdraked” stems from a story about a Romanian cryptocurrency trader who insisted on shorting BTC since he had done it effectively in the past. When the price of Bitcoin increased from USD 300 to USD 500, the Romanian investor lost all of his money.
B
Bear Market (Bearish)
A bear market occurs when a market endures extended price decreases. It usually refers to a situation in which stock values have fallen 20% or more from recent highs due to widespread pessimism and poor investor sentiment.
Individual stocks or commodities can be classified in a bear market if they have a 20% or greater fall over a sustained period of time—typically two months or more. Bear markets may also accompany general economic downturns, such as a recession. Bear market can be compared with the Bull market that is heading upward.
Because investors’ psyche begins to dread at this moment, they will sell previously held coins, causing the market to tumble even further.
Bull Market (Bullish)
A bull market is a financial market condition in which prices are rising or are projected to rise. The word “bull market” is most commonly associated with the stock market, but it can be applied to any tradable asset, including bonds, real estate, currencies, and commodities.
Because security prices increase and fall almost continually throughout trading, the phrase “bull market” is usually reserved for extended periods when a major part of security prices rise. Bull markets can endure for months, if not years.
BAGHOLDER
A BAGHOLDER, sometimes known as a Bag Holder, is an investor who continues to hang on to a coin or token whose value has considerably plummeted. Bagholders’ coins are either worthless or are in a downward spiral towards (or near to) $0.
Bottom Fishing
Bottom Fishing refers to investing in assets that have declined owing to intrinsic or extrinsic factors and are considered undervalued.
Bottom Fishing can be a risky approach when asset prices are legitimately depressed or a wise strategy when asset prices are selling at excessively low levels.
Value investing is one of the most prominent Bottom Fishing tactics, with Warren Buffett as its most well-known practitioner.
Blockchain
Blockchain is a shared, immutable ledger that makes it easier to record transactions and track assets in a corporate network. A tangible asset (a house, car, cash, or land) can be intangible (intellectual property, patents, copyrights, branding). A blockchain network can track and sell almost anything of value, lowering risk and costs for everyone involved.
Binary Option - Quyền chọn nhị phân
Options that are based on a binary success or failure outcome. The parties that choose the correct outcome (success of failure) win the entire pot.
Breakout
A breakout occurs when the price moves over or below a barrier or support level.
Because not all traders perceive or employ the same support and resistance levels, breakouts can be subjective.
Breakouts present potential trading opportunities. A breakout to the upside indicates that traders should consider going long or covering short holdings. A breakout to the south indicates that traders may consider going short or selling long positions.
Blockchain Bridge
A blockchain bridge is a connection that allows coins and/or arbitrary data to be transferred from one chain to another. Both chains may have distinct protocols, rules, and governance models, but the bridge provides a secure means for both chains to interoperate.
Bitconnect
BitConnect (BCC) is a Lending project with a monthly interest rate of up to 30%.
This is a scam project acting as a Lending model. After coming public, BCC climbed 400 times. Following it, the project was unable to pay interest to investors, and many investors lost all their assets.
Blockchain Address
On a blockchain network, a blockchain address is used to transfer and receive funds in the form of digital assets. It is a text string that indicates the source or destination of a transaction. Every blockchain will include wallet addresses generated by a computer cryptographic procedure.
Block reward
A block reward is the number of coins you receive if you successfully mine a block of the currency.
The value of the award is divided in half after every 210,000 blocks, or roughly every four years.
The amount is predicted to hit zero around 2140.
Budget
A budget is an estimate of revenue and expenses for a given period of time that is usually created and re-evaluated on a regular basis. Budgets can be created for an individual, a group of individuals, a company, a government, or almost anything else that generates and spends money.
C
Cryptocurrency
A cryptocurrency is a type of digital asset that is built on a network that is dispersed across many computers. Because of their decentralized structure, they can exist independently of governments and central authority.
CEX (Centralized Exchange)
The centralized cryptocurrency exchange is one of the most essential trading platforms for most digital currency investors. Centralized cryptocurrency exchanges are online venues where cryptocurrencies can be bought and sold. They are the most often used method for investors to acquire and dispose of cryptocurrency assets.
Some investors may find the concept of a “centralized” exchange to be misleading, given that digital currencies are frequently marketed as “decentralized.”
CeFi (Centralized Finance)
CeFi is an abbreviation for “centralized finance.” CeFi’s fundamental concept is to develop crypto investment options that combine the yield benefits of DeFi with the simplicity of use and security of traditional financial-services products (sometimes referred to as TradFi). CeFi allows you to borrow money, purchase and sell cryptocurrency, use a crypto debit card to spend and receive rewards, and more.
Collateral
An asset accepted as security for a loan or credit risk. In the case of options collateral is required to make sure that the trader can cover their position if they get margin calls.
Cross-chain
Cross-chain refers to the interoperability of two or more independent blockchains. In other words, this technology allows one blockchain to communicate with another blockchain even if they are on different networks. Crypto assets can be swapped or transferred between networks using cross-chain technology.
Cliff
Cliff Vesting is a method for firms to incentivize employees when they are first hired.
When an employee has earned the right to receive benefits from an employer benefit plan, they are said to be “vested.”
CeDeFi
CeDeFi, or centralized decentralized finance, is a hybrid of traditional financial services with the largely unregulated and high-risk world of DeFi. The overarching goal with CeDeFi is to combine modern and innovative financial products with the already established regulatory laws to ensure a higher level of safety when using, trading, and investing such financial instruments.
Circulating Supply
The supply under the law of supply and demand is circulating supply. If it is high and demand is low, the prices of the individual coins will fall. If supply is limited and demand is high, coin prices will rise, increasing the worth of the coins.
Circulating supply should not be confused with total or maximum supply.
Crypto Wallet
A cryptocurrency wallet is a device or program that holds your cryptocurrency keys and allows you to access your currencies.
Wallets contain a public key (the wallet address) as well as your private keys, which are required to sign bitcoin transactions. Anyone with access to the private key can control the coins linked with that address.
There are various types of wallets, each with its own set of features and levels of protection.
Call Options
A call is an option contract giving the owner the right but not the obligation to buy a specified amount of an underlying security at a specified price within a specified time.
The specified price is known as the strike price, and the specified time during which the sale can be made is its expiration or time to maturity.
Cryptojacking
Cryptojacking is a sort of cyberattack in which a hacker uses a target’s computational power to mine bitcoin on their behalf.
Individual customers, large institutions, and even industrial control systems can all be targets of cryptojacking.
Cryptojacking has grown in popularity as a method for fraudsters and criminals to take money from their victims in the form of bitcoin.
Conditional Strike Price
Only DBOE now offers conditional strike prices.
When conditional strike price is paired with strike price, price steps with a set price range are created, using a bull and bear spread strategy to restrict maximum losses for both buyers and sellers. Option seller, assisting investors in mitigating the risk of infinite loss.
D
DEX (Decentralized Exchange)
A DEX is a decentralized cryptocurrency exchange that allows users to trade straight from their cryptocurrency wallets. The exchange does not own their private keys and does not operate as an intermediary. Instead, smart contracts (self-executing scripts) are used to facilitate peer-to-peer transfers.
Example of DEX: Uniswap, Sushiswap,…
DBOE is the only Options DEX using On-chain CLOB Model.
DeFi (Decentralized Finance)
Decentralized finance (DeFi) is a new financial system that is built on secure distributed ledgers, similar to the ones used by cryptocurrencies. The system eliminates banks’ and institutions’ control over money, financial products, and financial services.
Dapp (Decentralized Application)
Decentralized applications (dApps) are digital applications or programs that live and execute on a blockchain or peer-to-peer (P2P) network of computers rather than a single computer. DApps (sometimes spelled “dapps”) exist outside of the scrutiny and control of a single authority. DApps, which are frequently constructed on the Ethereum platform, can be used for a range of applications, including gaming, banking, and social media.
Derivatives
Derivatives are financial contracts entered into between two or more parties and whose value is derived from an underlying asset, collection of assets, or benchmark.
A derivative can be traded on an exchange or off-exchange.
Derivative prices are determined by movements in the underlying asset.
Futures contracts, forwards, options, and swaps are examples of common derivatives.
DYOR (Do Your Own Research)
The term DYOR (Do Your Own Research) is well-known in the crypto and blockchain communities. It refers to conducting due diligence and acquiring relevant market knowledge in order to make sound investment judgments. In this essay, we will go over some major DYOR tools and how to use them for effective crypto research.
DAO (Decentralized Autonomous Organization)
Decentralized autonomous organizations (DAOs) are a new type of legal structure. Because there is no central governing authority, each member of a DAO often has a shared aim and strives to behave in the best interests of the entity. DAOs, which have gained popularity due to cryptocurrency fans and blockchain technology, are used to make choices in a bottoms-up management method.
Discord
Discord is a messaging program including chat, voice communication, and file-sharing features. Many apps offer equal functionality, but Discord stands out with a number of major features. It works on all platforms.
On-chain data
On-chain data is derived from a public ledger system that allows users to examine all transactions recorded on it. Using this transparency, various raw data containing information such as coins transferred amount and time, wallet address, and fees paid to a miner that show the details of the transactions may be derived from on-chain data. There is minimal opportunity for hiding in the on-chain procedure, and being “on-chained” allows you to be the bitcoin network’s watchdog.
Dash
Dash is a decentralized payment network that is part of an open-source initiative. Dash is the world’s 50th most valuable cryptocurrency by market value ($2.6 billion) in August 2021. Dash cryptocurrency is worth $251.68. Dash aspires to be a medium for daily transactions, and it has cast a wide net to achieve that goal.
E
Ecosystem in blockchain
A blockchain ecosystem is a set of interconnected technology elements that work together to build a system that performs a specific function. This system includes a variety of regulatory structures, such as person participation, data ownership, funding, exit and entry conditions, and information shared with system members.
Day-to-day operations can benefit from genuine decentralization, immutability, transparency, accountability, and flexibility enabled by the blockchain ecosystem.
Examples of some popular blockchain ecosystems: Ethereum, Binance Smart Chain, Solana, Terra, Near,…
Ethereum 2.0
Ethereum 2.0 is a significant upgrade to the Ethereum network, moving it from the proof-of-work (PoW) paradigm to the proof-of-stake (PoS) model.
Ethereum 2.0 intends to increase the network’s scalability, accessibility, and security.
Etherscan
Etherscan is a block explorer and analytics platform that allows you to monitor and analyze Ethereum network assets, balances, and transactions. Etherscan also allows you to effortlessly interact with smart contracts and check gas prices.
While it appears to perform many of the features of a cryptocurrency wallet, Etherscan is not a wallet service provider. It cannot store private keys or govern outgoing or incoming Ethereum blockchain transactions. It only displays public or on-chain data.
ERC-20
The Ethereum Request for Comment 20 (ERC-20) standard is used for fungible tokens issued on the Ethereum blockchain.
ERC-20 directs the production of new Ethereum blockchain tokens so that they are interchangeable with other tokens used in smart contracts.
Many new currencies produced using the Ethereum ecosystem employ the ERC-20 technical standard.
EMA
The EMA is a moving average that gives the most recent data points more weight and significance.
This technical indicator, like all moving averages, is used to generate buy and sell signals based on crosses and divergences from the historical average.
Traders frequently employ a variety of EMA durations, including 10-day, 50-day, and 200-day moving averages.
Exercising an Option - Thực hiện quyền chọn
In options trading, “to exercise” means to carry out the right to buy or sell the underlying security stipulated in the options contract.
To exercise an option, simply notify your broker that you want to exercise the option in your contract.
Before exercising an option, you should assess what kind of option you have and whether you can exercise it.
Expiration Time (in Options)
The expiration time of an options contract or other derivative is the precise date and time when it is rendered null and void. Derivatives contracts that expire out of the money (OTM) will be worthless, whereas contracts that expire in the money (ITM) will be evaluated based on the settlement price.
F
Fiat
Fiat money is a currency issued by the government that is not backed by a commodity such as gold.
Because central banks can regulate how much money is printed with fiat money, they have greater power over the economy.
The majority of current paper currencies, including the US dollar, are fiat currencies.
Fibonacci
Fibonacci study utilizes the work of twelfth-century Italian mathematician Leonardo de Pisa (commonly known as Fibonacci) to forecast stock or cryptocurrency trends and price behavior using a logical sequence of numbers. The Fibonacci Flush approach finds hidden support and resistance levels that an investor can use for entry, exit, and stop placement.
FOMO
FOMO stands for Fear of Missing Out.
Financial FOMO is more focused on money and investing. It occurs when you are concerned about missing out on financial success or profitable occurrences, and this concern causes you to do harmful activities in order to increase your fortune. You are continuously looking for new ways to make money, save money, and get ahead. You are pleased about finances, but this pleasure is tempered by a sense of dissatisfaction that you are “not doing as well as everyone else appears to be doing.”
Full lock duration
This includes the Cliff stage (if applicable). Without Cliff, full lock duration = vesting period in most circumstances.
For example, after TGE, the team / seed token normally does not start vesting immediately, but instead has a cliff for a bit. If the clift period is 12 months and the vesting period is linear 24 months, then from month 13 to month 36, you will receive 1/24 of the coins every month.
G
Gas Fee
Gas fees are the costs associated with launching a transaction or smart contract on the Ethereum network. The gas fee is paid in Ether and consists of a network fee plus a gas limit.
Currently, DBOE is assisting in paying this fee on behalf of users. That means, when you use the DBOE exchange, you will not have to pay any petrol fees.
Gas War
A gas war is a battle for first place in an upcoming block of transactions to be validated on a blockchain. When there is a great demand for a priority position, the price can skyrocket.
Gem
Gem – or Hidden Gem – is a term used to describe potential projects with low token/coin prices. These are often low- to mid-cap projects with high growth potential (x5, x10,… even x100).
Greeks
- Delta,\deltaδ– The price sensitivity of the option relative to the underlying asset i.e. how much the option price changes when the underlying assets price increases by $1. When buying a call option the delta is positive, when buying a put option the delta is negative.
- Theta,\thetaθ – Reflects the options price sensitivity with respect to time i.e. the $ change in the option price given time moved 1 day closer to the expiry.
- Gamma,\gammaγ – Reflects the rate of change between the Delta and the underlying asset price i.e. given a $1 change in price the Delta will change by the Gamma.
- Vega,\nuν – The price sensitivity of an option with respect to a change in the underlying asset’s implied volatility i.e. the $ change in the option given a 1% change in the underlying assets implied volatility.
H
Holdl / Hold coin
Essentially, “HODL” was a misspelling that has since gained popularity as a hilarious backronym:
“HODL” stands for “Hold on for dear life.”
Hackathon
A hackathon is an event in which participants employ technology, typically coding, to achieve a goal. Without a doubt, hackathons have grabbed the world by storm, sparking the invention of daily items and transferring millions of dollars. And, with the advent of starter hackathons and the availability of online hacking tutorials (of course, ethical hacking), it’s never been easier to get started!
Some examples of blockchain hackathons: DeFi Connected Hackathon của Terra, Solana Season Hackathon của Solana,…
Halving
A Bitcoin Halving event occurs when the reward for mining Bitcoin transactions is lowered in half.
This occurrence also decreases Bitcoin’s inflation rate and the rate at which new bitcoins enter circulation in half.
Previous halvings have been associated with strong boom and bust cycles that concluded with greater prices than before the event.
Hard Cap
A hard cap is the maximum amount of money that can be raised for a project. It is defined as the most money a project will accept during the Initial Coin Offering (ICO). Once the project’s hard cap has been achieved, the ICO will be closed and the project will no longer take funds.
Hard Fork
A hard fork is a significant modification to a blockchain network’s protocol that results in two branches, one that adheres to the prior protocol and one that adheres to the new version.
Holders of tokens on the original blockchain will be awarded tokens on the new fork as well, but miners must pick which blockchain to continue verifying in a hard fork.
Any blockchain, not just Bitcoin, can experience a hard fork (where hard forks have created Bitcoin Cash and Bitcoin SV, among several others, for example).
HYIP
HYIP stands for High Yield Investment Programs, which are extremely successful investment programs, yet nearly all large profit investment trust initiatives are scams.
Hedging (in Options)
Although it may appear that the phrase “hedging” alludes to something done by your gardening-obsessed neighbor, hedging is a valuable practice that every investor should be aware of when it comes to investing. Hedging is a technique to acquire portfolio protection in the stock market, and protection is often just as vital as portfolio appreciation.
Hedging is frequently discussed in a broader context than it is described. It is, however, not an esoteric term. Even if you are a novice investor, learning what hedging is and how it works might be advantageous.
I
ICO - Initial Coin Offering
Initial coin offers (ICOs) are a popular technique to raise funding for cryptocurrency-related products and services.
ICOs are comparable to initial public offerings, except that the tokens issued in an ICO can also be used to purchase a software service or product.
A few ICOs have produced profits for investors. Many others have proven to be bogus or have performed poorly.
IDO - Initial Decentralized Exchange Offering
An initial DEX offering, or IDO, is a new and innovative sort of decentralized and permissionless crowdfunding platform that is ushering in a new era of crypto fundraising.
When a project launches an IDO, it is launching a coin or token through a decentralized liquidity exchange. This is a sort of crypto asset exchange that is based on liquidity pools and allows traders to swap tokens such as crypto coins and stablecoins. USDT/ETH, for example, is a liquidity pair.
IEO - Initial Exchange Offering
An Initial Exchange Offering (IEO) is a token sale overseen by a cryptocurrency exchange. IEOs are only available to exchange users, albeit some IEOs may occur on multiple exchanges. IEOs, like ICOs, allow investors to obtain new cryptocurrencies (or tokens) while generating funding for promising crypto projects.
IGO - Initial Game Offering
An Initial Game Offering (or IGO) is a type of crowdfunding operation that is typically carried out by a developing GameFi tech start-up company. IGOs are essentially launch pads that allow prospective customers to participate in and invest in video game-based cryptocurrency ventures. While some of these projects are still in their early stages and are extremely conceptual, the majority of them make their debut as something closer to a finished product. These frequently let a potential investor interact with a product before it is fully released, giving them a better picture of where their money will be going.
IFO - Initial Farm Offering
Initial Farm Offering (IFO) is a fundraising technique that assists new DeFi projects in raising funds by participating in pre-sales events hosted by decentralized exchanges after rigorous project vetting.
The initial coin offering (IFO) is a forerunner of the initial coin offering (ICO), a crowdsourcing mechanism used by cryptocurrency ventures to generate funding in the early stages.
Impermanent loss (IL)
Impermanent loss (IL), often known as ‘temporary loss’ in English, is a phenomenon that emerged with the introduction of decentralized banking (DeFi). The ‘temporary loss’ is caused by an automated rebalancing method used by AMM protocols.
Simply explained, the term “temporary loss” refers to the difference in value between owning tokens in an AMM protocol and holding those same tokens outside the network. There will be no additional loss until prices revert to where they were when you entered the pool. If the price does not rebound and you exchange your tokens at that time, you will lose money.
K
KYC (Know Your Customer)
Know Your Customer (KYC) standards are used in the investing and financial services industries to authenticate consumers and understand their risk and financial profiles.
The customer identification program (CIP), customer due diligence (CDD), and enhanced due diligence are the three components of KYC (EDD).
Before opening an investing or banking account, the SEC requires each new consumer to furnish thorough financial information.
L
Layer
Blockchains use a layered design to provide this one-of-a-kind technique of transaction authentication.
Launchpad
A crypto launchpad is a fundraising platform that allows investors to invest in early crypto projects before they are publicly listed.
This allows them to purchase tokens at a lower cost, maximizing their return on investment when the price rises and they sell them later.
For crypto projects, obtaining funding through a launchpad allows them to reach a larger audience of investors. This prevents a large amount of their tokens from being purchased by whales and used in pump and dump scams, causing their token prices to plummet.
Leverage
Leverage shows the situation that consumers borrow money from the exchange to Long / Short. This allows players with less capital to make more money if the price moves in a favorable manner (Long and then the price rises, or Short and then the price falls), but it also causes the player to lose money if the price moves in the opposite direction (Long but the price goes down, or Short but the price goes up).
Liquidity
Liquidity is frequently related with trading volume since the more units of a cryptocurrency that can be “traded” (bought or sold) on an exchange, the more “liquid” the cryptocurrency is said to be. Higher trade volume on crypto exchanges indicates a greater number of buyers and sellers on their trading platform.
Liquidity Provider
Liquidity providers are users who contribute their crypto assets to a platform in order to enable trading on it and receive benefits in return. While liquidity may be achieved on fiat currency exchanges by purchasing large sums of cash and selling it to clients in smaller batches, the method for digital currencies is slightly different.
Long Call Options
When an investor buys one or more call options on a stock or index, he is said to be long the option. The word “going long” refers to purchasing a security rather than selling one, and it can relate to being long a stock, long an option, long a bond, long a coin, long an ETF, or just holding a position.
Long Put Options
When an investor buys a put option and owns it, he is considered to be long the put option. Going long refers to purchasing a cryptocurrency and includes being long a call and long a put. When you buy a put option, you are hoping that the underlying stock or index price will fall below the strike price of the put option.
M
Mainnet
A Mainnet is a self-contained blockchain network that employs its own protocols and technologies. Mainnets are essentially the “live” version of Testnets. A Testnet, on the other hand, is an alternative blockchain network that is frequently used by developers for beta testing new protocols and technology. The goal of a Testnet is to develop technologies and protocols that will eventually be operated on the Mainnet after developers are convinced that they will not threaten the Mainnet’s functionality.
Margin
Margin is the difference between the entire value of an investment and the loan amount obtained from a broker to purchase an investment.
Margin trading is the practice of using borrowed cash from a broker to trade a financial asset that serves as collateral for the broker’s loan.
Mint
In the crypto ecosystem, the minting process involves the validation of transactions that will be added as new blocks to a blockchain network. Blockchain networks are fundamentally meant to function as distributed ledgers, which means that users can use these ecosystems to record on-chain transactions and check their legitimacy. Minting validates transactions in Proof-of-Stake (PoS) blockchain networks, whereas mining supports Proof-of-Work (PoW) consensus.
Money Flow
Money Flow is defined as the overall cash flow of the market. When money enters an ecosystem, the value of the tokens in the system rises.
Multichain
Multichain is an open-source blockchain technology that enables apps and protocols to connect to multiple blockchains, making data from both chains interoperable. Blockchain development is used for personal purposes as well as to accelerate financial transactions.
Market cap
Market capitalization in the stock market refers to the entire market value of all outstanding shares of a company.
It’s similar in cryptocurrency, except that unlike stocks, cryptos do not reflect equity in a corporation. The market cap of a coin is just the sum of all available coins at the current price per coin. Consider cashing out every Bitcoin in existence at the same moment. That is the market capitalization.
Formula for calculating market cap:
Market cap = Coin price x Total coin outstanding.
N
NFT
An NFT is a digital asset that represents real-world artifacts such as art, music, in-game items, and videos. They are bought and traded online, frequently using cryptocurrency, and are generally encoded with the same underlying software as many cryptos.
Non-custodial
Non-custodial mainly refers to DEXs and wallets that do not keep user funds. That is, the producer merely needs to manufacture the product; the user keeps his property. Unlike DEX, CEX requires customers to register an account and deposit money on the exchange, which means the exchange will hold this amount.
Another distinction between Non-custodial and Custodial is whether or not the user has access to the wallet’s private key. If affirmative, then non-custodial.
Naked Option - Quyền chọn khống
Naked options are those that are sold without any previously reserved shares or cash to satisfy the option obligation upon expiration.
Naked options are vulnerable to big losses due to a quick price shift before expiration.
Exercising naked call options results in a short position in the seller’s account.
Exercising naked put options creates a long position in the seller’s account, which is purchased using available cash.
O
Options
Contracts, which let the buyer of a 1) call (put) choose whether or not they want to 2) buy (sell) the underlying asset at the 3) strike price once the contract hits its 4) expiry date
Options Premium
Is the market price of purchasing an option. By paying the premium you purchase the right to exercise an option. The seller receives this premium as their payoff for selling the option.
OTC Trading
OTC trading is an abbreviation for over-the-counter trading, and it refers to the process of exchanging financial assets directly between two individuals without the involvement of a central exchange. An OTC market is another phrase that has to be defined. An OTC market is a decentralized market in which traders and brokers can trade stocks, shares, currencies, and other financial products without the use of a middleman. This is where the majority of financial market trading transactions take place.
Order Book
A list of orders on a particular asset reflecting all the orders from the different buyers and sellers open in a market. It effectively shows the price and volume that participants are willing to buy/sell the asset for.
Oracle
Oracle is an essential component of DeFi; projects working on Oracle will enable other crypto projects to update data in real time. Chainlink, Band Protocol, DIA, and other projects working in this field are examples.
P
Put Options
Put options offer option holders the right, but not the responsibility, to sell a predetermined quantity of an underlying securities at a predetermined price within a predetermined time frame.
Put options are available on a variety of assets, such as stocks, indices, commodities, and currencies.
PnL (Profit & Loss)
Profit and loss (PnL) can be realized or unrealized. It can be used to indicate the change in the value of a trader’s positions. When you have open positions, your PnL is unrealized, which means it is still altering in response to market movements. When you close your positions, the unrealized PnL becomes realized PnL.
Pump & Dump Coin
Pump and dump (P&D) is a frequent cryptocurrency trading scheme that involves increasing the price of an owned cryptocurrency by deceptive statements in order to sell the cheaply obtained cryptocurrency at a higher price.
Private key (in Crypto wallet)
A private key is a security password used in cryptocurrency to allow investors to access their cash. It’s a long string of numbers and letters generated the first time you open a crypto wallet.
As long as you have your private key, you can control your coins from anywhere in the world. The private key’s role in cryptography is to encrypt and decrypt crypto access.
Pool
Commonly found in DEX and Lending projects. Pool refers to a “lake” in which users deposit assets and wait for others to buy, trade, or borrow according on their needs. In exchange, the person who contributes assets to the pool is known as a Liquidity Provider and earns a transaction fee.
PoA (Proof of Authority)
Proof of authority (PoA) is an alternative consensus mechanism that ensures network transactions are validated by authorized authorities. All network participants know and trust these authorities. Using a Byzantine fault tolerance (BFT) mechanism, PoA enables the blockchain network to complete transactions more quickly.
PoB (Proof of Burn)
Proof of burn (POB) is an alternative consensus technique that attempts to alleviate the POW system’s high energy usage. POB is frequently referred to as a POW system with no energy waste. It works on the premise that miners can “burn” virtual money tokens. They are then given the ability to write blocks in proportion to the amount of bitcoin burned.
PoD (Proof of Developer)
Proof-of-developer (PoD) is a method of connecting a blockchain project with its true developer or developers. The procedure stops fraudsters from taking over a project, particularly the finance, and failing to deliver the end product to investors. With cryptocurrency-based initiatives, proof-of-developer is frequent.
PoS (Proof of Stake - Bằng chứng cổ phần)
Individuals invest cryptocurrency in order to validate transactions using proof-of-stake (PoS). The primary alternative to cryptocurrency mining is PoS. Peercoin, which was released in 2012, was one of the first cryptocurrencies to use this consensus technique.
PoW (Proof of Work - Bằng chứng xử lý)
Proof of work (PoW) is a decentralized consensus technique that compels network users to spend time solving an arbitrary mathematical puzzle in order to prevent anyone from manipulating the system. Proof of work is frequently employed in cryptocurrency mining to validate transactions and mine new coins.
Ponzi
Ponzi is a type of pyramid scheme.
Ponzi schemes work by handing out large sums of money to those who invest. Taking money from the latter in order to pay the former. When it becomes impossible to pay interest to investors, the Ponzi scheme will defraud them of their money.
Some examples of Ponzi projects: Bitconnect, Ifan, Pincoin…
R
Rekt
REKT is a slang term for heavy losses in a cryptocurrency investment.
REKT was originally slang for “wrecked.” Simultaneously, gaming culture, particularly Tony Hawk’s high-octane, stunt arcade game of the same name, has helped popularize the lingo. The game is well-known for its spectacular acrobatics, exceptional tricks, aerial flips, double flips, barrel rolls, and perilous races. Furthermore, the game offers a competitive mode that comprises a single-player game mode, two single-player game modes, and the multiplayer arena with fun rivalry with friends and limitless challenges.
ROI (Return on Investment)
Return on investment (ROI) is a performance metric used to assess the efficiency or profitability of an investment or to compare the efficiency of several projects. ROI attempts to directly assess the amount of return on a certain investment in comparison to the cost of the investment.
To calculate ROI, divide the benefit (or return) of an investment by the cost of the investment. The outcome is expressed as a percentage or a ratio.
Risk-free Rate of Return
The risk-free rate of return is the theoretical rate of return on a risk-free investment.
In actuality, the risk-free rate of return does not exist because every investment involves some level of risk.
Subtract the inflation rate from the yield on the Treasury bond that corresponds to the length of your investment to calculate the real risk-free rate.
S
Satoshi
Bitcoin is supposed to have been invented by Satoshi Nakamoto. Satoshi, commonly known as sat, is Bitcoin’s smallest currency: 1 BTC = 100,000,000 sat.
Shilling
The Shilling was the former currency of both the United Kingdom and Austria.
In Crypto, however, this phrase refers to the act of inflating news about a project in order to enhance the value of a specific coin.
Smart Contract
A smart contract is a self-executing contract in which the conditions of the buyer-seller agreement are directly encoded into lines of code. The code and the agreements contained within it are spread across a decentralized blockchain network. Transactions are trackable and irreversible, and the code controls the execution.
Stablecoin
Stablecoins are cryptocurrencies whose value is connected to another money, commodity, or financial instrument. Stablecoins seek to give an alternative to the excessive volatility of the most popular cryptocurrencies, such as Bitcoin (BTC), which has rendered such investments unsuitable for widespread usage in transactions.
Short Call Options
A short call is an option position used as a trading technique when the trader believes the price of the underlying asset will fall. As a result, it is regarded as a negative trading strategy.
Short calls have a limited profit potential and an endless loss potential. They are often employed only by seasoned traders and investors.
Short Put Options
A short put is when a trader begins an options trade by selling or writing a put option. The trader who purchases the put option is long it, while the trader who writes it is short it.
The premium (option cost) is paid to the writer (short) of the put option, and the profit on the trade is restricted to that premium.
Options Settlement
Settlement is the process by which the terms of an options contract are resolved between the parties when they are exercised. Exercising can be done voluntarily if the holder chooses to do so before the contract expires, or automatically if the contract is in the money at the time of expiration.
Although settlement is theoretically between the holder and writer of options contracts, the procedure is managed by a clearing institution. The clearing organization effectively resolves contracts with the holder when the holder exercises or an option is automatically exercised.
Spot Price
Is the current market price of the underlying asset.
Strike Price
Is the price defined in an option contract specifying the price that the underlying asset will be bought / sold at.
T
Testnet
The testnet is an alternate Bitcoin or Ethereum block chain for testing purposes. It is a sandbox for software developers to test their code before making potentially costly deployments to the mainnet. It is appropriate for both full-time blockchain developers and students wishing to hone their skills.
Trader
Traders are investors in general. However, traders are typically short-term investors who can purchase and sell over a period of days, weeks, or months, or who use margin as a trading technique.
Holder is the polar opposite of Trader.
TVL - Total Value Locked
Total Value Locked (TVL) is a formula that calculates the total value of all crypto assets that have been locked up (or staked) in a Defi (decentralized finance) protocol. TVL is frequently used to convey a Defi protocol’s total activity, interest, and even value to potential investors. This quantity is normally expressed in USD, while some protocols express it in total ETH or BTC value.
The current TVL can be found at defillama.com or defipulse.com.
Token
A token is a cryptocurrency that, in order to function, must be based on another cryptocurrency. Augur (REP), Basic Attention Token (BAT), and other cryptocurrencies are built on the Ethereum platform.
TP (Take Profit)
A Take Profit (TP) is an instruction to close a trade at a certain rate if the price is moving in your favor, ensuring that the profit is realized and added to your available balance. If the market hits your desired rate and you have achieved the predetermined amount, the Take Profit will activate and immediately close your trade.
To the moon
This phrase is used to indicate that a specific currency would increase dramatically in the future, and it is an indication of long-term increase, not a momentary one.
Total Supply
Is the total amount of coins that have been created on the market, whether they are in circulation or not, excluding circumstances when the coin has been taken from the market.
Transaction
This word is probably certainly used in the investment industry. It refers to trading, in which you can place purchase or sell orders for a certain product, such as Bitcoin or Ether.
Transaction block
Investor transactions in the virtual currency network will be encrypted and recorded in a specific block, which will subsequently be added to the blockchain.
Transaction fee
Is the transaction charge that the investor must bear, calculated as a percentage of the transaction value. Furthermore, when withdrawing or depositing funds, investors are subject to third-party costs.
V
Vesting
This term appears frequently in project token release schedule sections. Vesting is defined as a period of time during which the token is paid in installments; users in this category will receive the token gradually until they obtain the complete token. Typically, this refers to tokens held by the team, advisers, or investors.
For example:
Team Assignment: Cliff 12 months, vesting 12 months, which implies that there is no token for the team for the first 12 months, and the token will be gradually paid from month 13 to month 24.
Vesting Period
This is when tokens are allocated in accordance with the vesting schedule.
For example:
Monthly vesting for 12 months, i.e. 1/12 of total tokens per month
Volatility
Reflects the extent to which the underlying asset is expected to fluctuate between now and the asset expiry.
Volume
The amount of an asset or security that changes hands over a specific period of time, usually a day, is referred to as volume.
W
Whitelist
The term “whitelist” has several connotations. A whitelist is a word used in the blockchain and cryptocurrency field to refer to Initial Coin Offering (ICO) events or withdrawal addresses for exchanges.
A whitelist is a list of registered and approved participants who are allowed exclusive access to contribute to an ICO or pre-sale during an ICO event.
Y
YTD
Year to date (YTD) refers to the amount of time from the first day of the current calendar year or fiscal year to the present date. YTD data is important for examining business trends over time or comparing performance statistics to competitors or peers in the same industry. The abbreviation frequently changes ideas like as investment returns, earnings, and net pay.
Yield Farming
Yield farming is a process that allows bitcoin investors to lock up their assets in exchange for rewards. It’s a procedure that allows you to earn either fixed or variable interest by investing in a DeFi market.
Simply explained, yield farming is the practice of lending bitcoin across the Ethereum network. When banks make loans with fiat money, the amount lent is repaid with interest. The premise is the same with yield farming: cryptocurrency that would otherwise be sitting in an exchange or a wallet is lent out via DeFi protocols (or locked into smart contracts in Ethereum terms) to earn a return.
