0DTE
“Zero days to expiration.” An option that expires at the end of the current trading day. 0DTE contracts can be highly sensitive to price changes and time decay.
Altcoin
A cryptocurrency other than Bitcoin. The term can cover large, established networks as well as smaller, highly speculative tokens.
Ask
The lowest price a seller is currently willing to accept for an asset. The gap between the ask and the bid is the spread.
Assignment
The process by which an option writer is required to fulfil the obligation created by an exercised option.
At-the-money (ATM)
An option whose strike price is at or very near the current price of the underlying asset.
Basis
The difference between the price of a derivative, such as a futures contract, and the relevant spot or cash-market price.
Bid
The highest price a buyer is currently willing to pay for an asset.
Bitcoin (BTC)
A decentralized digital asset and blockchain network launched in 2009. Bitcoin is also the underlying reference for various spot and derivatives products.
Blockchain
A distributed ledger that records transactions across a network of computers according to a defined consensus process.
Call option
A contract that gives the buyer the right, but not the obligation, to buy the underlying asset at a specified strike price on or before expiration, subject to contract terms.
Cash-settled option
An option that settles in cash based on the final value of the underlying reference rather than through delivery of shares or another asset.
Centralized exchange (CEX)
A trading venue operated by a central organization that matches orders and typically controls account access, custody or settlement processes.
Clearing
The process that manages obligations between buyers and sellers after a trade. Exchange-traded futures and listed options use central clearing structures.
Contango
A futures-curve condition where longer-dated futures trade above nearer-dated contracts or spot, often reflecting financing, storage or market expectations.
Copy trading
A service in which trades placed in one account are automatically replicated in another. At Royal Clover, trades from our company account are replicated into each client’s own account by software.
Covered call
An options strategy that combines a long position in the underlying with a short call on the same underlying. It can generate premium but caps some upside and does not eliminate downside.
Credit spread
An options spread entered for a net premium received. Depending on the structure, risk can be defined by the distance between strikes.
Cross margin
A margin mode in which all the collateral in an account supports every open position, so profit on one position can offset loss on another.
Crypto derivative
A financial contract whose value is linked to a digital asset, such as a futures, option or perpetual futures contract.
Delta
An option Greek that estimates how much an option’s price may change for a $1 change in the underlying, all else equal.
Derivative
A financial instrument whose value is derived from an underlying asset, rate, index or other reference.
Drawdown
The decline from a previous account or strategy equity peak to a subsequent low. Maximum drawdown is the largest such decline over a period.
E-mini futures
Smaller-sized futures contracts on major benchmarks, including widely traded equity-index products such as E-mini S&P 500 and E-mini Nasdaq-100.
Equity option
A listed option whose underlying is a stock. Options may also be listed on ETFs and securities indices.
Exercise
The action by an option holder to use the contractual right to buy or sell the underlying according to the option’s terms.
Expiration
The date or time when an option or futures contract ceases trading or reaches settlement, according to product rules.
Extrinsic value
The portion of an option premium above intrinsic value. Time to expiration and implied volatility are important drivers of extrinsic value.
Funding rate
A periodic payment used by many crypto perpetual-futures markets between long and short positions to help align the contract price with spot.
Futures commission merchant (FCM)
A regulated intermediary that solicits or accepts orders for futures and related products and may hold customer funds, subject to applicable CFTC/NFA rules.
Futures contract
A standardized agreement traded on an exchange to buy or sell an underlying reference at a future time under specified terms. Many financial futures are cash settled.
Gamma
An option Greek that measures how quickly Delta changes as the underlying price changes.
Greeks
A group of measures—commonly Delta, Gamma, Theta, Vega and Rho—used to describe how option values respond to changes in market inputs.
Hedge
A position intended to offset or reduce risk in another position or portfolio. A hedge can reduce risk but may also reduce potential return.
Hyperliquid
A decentralized exchange focused on perpetual futures, where trades, transfers and positions are recorded on its own public blockchain. Royal Clover’s crypto company account trades on Hyperliquid.
Implied volatility (IV)
The volatility level implied by option prices. IV is a market input, not a guarantee of how much the underlying will actually move.
Initial margin
The amount required to establish a futures position. It is a performance bond and is not the maximum amount that can be lost.
In-the-money (ITM)
An option with intrinsic value. For calls, the strike is below the underlying price; for puts, the strike is above it.
Intrinsic value
The immediate exercise value of an option, if any, based on the relationship between the underlying price and the strike price.
Isolated margin
A margin mode in which each position has its own dedicated collateral, so a loss on one position cannot draw on the rest of the account.
Leverage
Exposure to a larger notional position relative to the capital posted. Leverage magnifies both gains and losses.
Limit order
An instruction to buy at a specified price or lower, or sell at a specified price or higher. Execution is not guaranteed.
Liquidation
The forced closing of a leveraged position when losses reduce its margin below the required maintenance level.
Liquidity
The ability to trade an instrument with sufficient volume and relatively small price impact. Liquidity can change rapidly by time of day and market condition.
Long
A position that profits when the price of the underlying rises. A long option is created by buying a call or put; the buyer generally risks the premium paid.
Maintenance margin
The minimum futures-account equity required to keep a position open. If equity falls below this level, additional funds or position reduction may be required.
Maker / Taker
A maker adds a resting order to the order book; a taker fills against an existing order. Exchanges typically charge takers a higher fee than makers.
Margin
Capital required by a broker, exchange or clearing system to support leveraged positions. Margin rules vary by product and venue.
Mark price
The reference price an exchange uses to value open positions and trigger liquidations, designed to be harder to manipulate than the last traded price.
Market order
An order to buy or sell immediately at the best available price.
Mark-to-market
The process of revaluing a position using current market prices. Futures positions are generally settled to market through daily variation margin.
Micro E-mini futures
Futures contracts that are 1/10 the size of corresponding E-mini equity-index futures, allowing more granular position sizing.
Moneyness
The relationship between an option’s strike price and the current price of the underlying: in-the-money, at-the-money or out-of-the-money.
Notional value
The total economic value represented by a derivative position, which can be much larger than the margin or premium paid.
Open interest
The number of outstanding derivative contracts that have not been closed, exercised or expired.
Option premium
The price paid by an option buyer and received by an option seller, typically quoted per share, with standard equity option contracts generally representing 100 shares.
Options chain
A display of available call and put contracts for an underlying, organized by expiration, strike and market data.
Order book
The live list of buy and sell orders for an asset at each price level.
Out-of-the-money (OTM)
An option with no intrinsic value at the current underlying price.
Perpetual futures
A futures-like crypto derivative with no fixed expiration date. Many perpetual markets use funding payments to help keep the contract price aligned with spot.
Position sizing
The process of determining how much exposure to take based on risk limits, volatility, stop distance, notional value or other strategy rules.
Private key
The secret cryptographic key that controls a crypto wallet. Anyone with the private key can move the funds, so it must never be shared.
Put option
A contract that gives the buyer the right, but not the obligation, to sell the underlying asset at a specified strike price on or before expiration, subject to contract terms.
Realized PnL
Profit or loss that has been locked in by closing all or part of a position.
Realized volatility
The actual historical variability of returns over a measured period.
Reduce-only
An order setting that only allows an order to decrease an existing position, never to open or increase one.
Risk capital
Money that can be lost without jeopardizing necessities, emergency savings or long-term financial obligations.
Risk-defined strategy
A trade structure where the maximum loss is known or capped at entry under normal contract mechanics, such as many vertical option spreads.
Roll
Closing a position in one expiration and opening a position in another expiration or strike to maintain or alter exposure.
Short
A position that profits when the price of the underlying falls.
Slippage
The difference between the expected execution price and the price actually received.
Spot
Buying or selling an asset for immediate delivery, as opposed to trading a derivative contract on its price.
Spread
A position involving two or more related legs. Options spreads can combine strikes or expirations; futures spreads can combine different contracts or markets.
Stablecoin
A cryptocurrency designed to hold a stable value, usually one US dollar, such as USDC or USDT.
Stop order
An order that becomes active after a specified stop price is reached. A stop does not guarantee the final execution price, especially in fast or gapping markets.
Strike price
The price at which an option holder may buy or sell the underlying according to the contract.
Systematic trading
A trading approach that uses explicit, repeatable rules for market selection, entries, exits, sizing and risk rather than relying primarily on discretionary judgment.
Theta
An option Greek that estimates the effect of the passage of time on an option’s theoretical value, all else equal.
Tick
The minimum permitted price increment for a futures contract or other exchange-traded instrument.
Time decay
The reduction in an option’s extrinsic value as expiration approaches, all else equal. Time decay generally accelerates near expiration.
Underlying
The asset, index, rate or other reference on which a derivative contract is based.
Unrealized PnL
The profit or loss on a position that is still open, based on the current mark price. It changes until the position is closed.
Vega
An option Greek that estimates sensitivity to changes in implied volatility.
Volatility
A measure of how much and how quickly prices move. Traders distinguish between realized volatility and implied volatility.
Volatility skew
The pattern of implied volatility across different strikes for the same expiration.
Wallet
Software or hardware that stores the keys used to hold and send crypto assets.
Win rate
The percentage of closed trades that were profitable.
Writer
The seller of an option contract who receives premium and assumes the contractual obligation associated with the option.
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