Futures trading glossary
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This page collects the terms you meet in Snapback and in the help articles. The explanations are simple: they do not replace the exchange's own rules and only help you understand the words. All examples are illustrations of a mechanism, not advice.
Short
A position on the price falling. You first sell a contract and then buy it back. If the price fell, you buy back cheaper and keep the difference. If it rose, you buy back higher and take a loss. In theory the price can rise without limit, so the loss on a short without a stop is theoretically unlimited. More in how to short crypto on Binance.
Futures
Contracts whose price is tied to the price of a coin. You trade not the coin itself but a contract on it, so you can open a position both up and down and use leverage. Snapback works with Binance USDT-M futures: settlement and margin are in USDT. Such contracts have no expiry date (they are also called perpetual), and the funding mechanism keeps their price close to the coin's price.
Margin
Your own money set aside for a position as collateral. Margin equals the position size divided by leverage. In Snapback the "Entry size, % of deposit" field sets the share of the deposit that becomes the margin of one trade.
There are two modes: isolated margin (only that position's margin is set aside for it) and cross (the whole futures account balance backs the position). Before entering, Snapback tries to switch the coin to cross.
Leverage
A multiplier: how many times the position size exceeds your margin. An illustration: 100 USDT of margin at 5x leverage gives a 500 USDT position, and a 1% price move changes the result by 5 USDT, which is 5% of the margin. Leverage multiplies both profit and loss, so it does not make a strategy better, it only increases the stake. In the wizard leverage is capped so that liquidation sits beyond the stop loss. More in Binance futures leverage and liquidation.
Liquidation
The exchange force-closing a position when the margin can no longer cover the loss. Liquidation is usually worse than your own stop: the exchange takes an extra charge and you do not choose the price. That is why Snapback does not allow leverage at which liquidation would come before the stop.
Take profit
An order that closes a position (or part of it) when the price reaches the profit level you want. For a short, the take profit sits below the entry price. In Snapback you can set one, two or three take-profits and divide the size between them. The distance you set is the distance to the last take profit; the ones in between are spaced evenly. More in stop loss and take profit on Binance futures.
Stop loss
An order that closes a position when the price moves against you by a set percentage. For a short, the stop sits above the entry price. In Snapback the stop is set as the price move against the position (from 10% to 30%), not as a share of the deposit. The stop fills at the market, so the fill price can be worse than the trigger price.
Breakeven
A state in which closing the position gives neither profit nor loss. A "breakeven stop" means moving the stop to the entry price (in Snapback, adjusted for fees) after the first or second take profit has filled. It reduces the risk on the rest of the position but does not guarantee a zero result. More in how a breakeven stop loss works.
Funding
A periodic payment between those holding long and short positions on perpetual futures. It keeps the contract's price close to the coin's price. When the funding rate is positive, longs pay and shorts receive: a short receives. When it is negative, the reverse. The sign and size of the rate change. On the Trades page funding has its own column and is included in the "Net" result.
Testnet
A separate practice environment from Binance with virtual money. The key for it is obtained separately (at testnet.binancefuture.com) and does not work on the real exchange, nor the other way round. The permissions of such a key are fixed, and there is nothing to withdraw. If the service is running in test mode, the key connection form has the checkbox "this is a testnet key": it must match the service's mode. Results on the testnet do not show how things would be on the real exchange: liquidity and market behaviour there are different.
Maker order
An order that rests in the order book and waits its turn instead of filling at once at the current price. The exchange usually charges a lower fee (maker) for it than for a market order that takes existing liquidity (taker). Snapback's entry order is like this by default: "maker only" (post-only). If it would fill at the market immediately, the exchange rejects it, so the fee always matches the calculation. The price you pay for this is that the order may not fill if the price does not return to it within the allowed time.
Frequently asked questions
What is a short in crypto?
It is a position on the price falling: you first sell a contract and then buy it back. You profit if the price fell and lose if it rose.
What is the difference between leverage and margin?
Margin is your own money set aside for a position; leverage is the multiplier. Margin multiplied by leverage gives the position size.
What is a maker order in simple terms?
It is an order that rests in the order book and waits, rather than taking the price at once. It usually carries a lower fee than a market order.
What is the Binance testnet?
It is a separate practice environment with virtual money. You can try a trading bot there without risking real funds.