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Biturai Trading Wiki
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Maker and Taker Fees in Futures Trading
Maker and taker fees are fundamental transaction costs in futures trading, distinguishing between orders that add or remove market liquidity.
Trailing Stop Orders in Futures Trading
A trailing stop is a dynamic risk management tool that automatically adjusts its trigger price as the market moves favorably for a trader.
Understanding Reduce-Only Orders in Futures Trading
A reduce-only order is a specialized instruction in futures trading designed to ensure that an existing position is only decreased or closed.
Trading the Basis Spread Across Multiple Expiries
A basis spread trade involves simultaneously buying and selling an asset or its derivatives across different expiration dates to profit from price differentials.
Open Interest vs. Volume: Distinguishing Two Key Metrics
Open Interest and Volume are distinct metrics used in financial markets, particularly for derivatives, to gauge market activity and participant commitment.
American vs. European Style Options: A Comparison
American style options allow holders to exercise their right to buy or sell the underlying asset at any time before expiration, offering greater flexibility.
Box Spread: An Arbitrage-Like Options Construction
A box spread is an options trading strategy designed to lock in a nearly risk-free profit by combining specific call and put spreads.
Bull Put Spread: A Detailed Look at the Bullish Credit Spread
The bull put spread is an options strategy designed to profit from a stable or rising underlying asset price.
Cash-Secured Put as an Entry Strategy
A cash-secured put is an options strategy where an investor sells a put option and simultaneously sets aside enough cash to buy the underlying stock if assigned.
Gamma vs. Theta: The Core Conflict in Options Trading
Options traders constantly balance the potential for rapid profit from price movements against the inevitable erosion of value due to time decay.
DVOL: The Deribit Volatility Index for Bitcoin
The Deribit Volatility Index (DVOL) measures the expected 30-day annualized volatility of Bitcoin, serving as a key indicator for market sentiment.
Put-Call Parity: The Relationship Between Option Prices
Put-call parity describes a fundamental no-arbitrage relationship linking the prices of European call and put options with the same strike price and expiration date.
Settlement Price: Determination at Derivatives Expiration
The settlement price is the official benchmark used to value open derivative positions and determine financial obligations at the end of a trading day or upon contract expiration.
Rolling Quarterly Futures Positions
Traders often roll futures positions to extend their market exposure without taking physical delivery or cash settlement of an expiring contract.
Annualized Basis: Converting Futures Premium to Annual Yield
The annualized basis translates the price difference between a futures contract and its spot counterpart into a yearly return.
Basis Convergence: Why Futures and Spot Prices Align at Expiration
The phenomenon of basis convergence describes how the price of a futures contract and the spot price of its underlying asset gradually become identical as the contract approaches its expiration date.
Futures vs. Spot: Key Differences for Crypto Traders
Understanding the fundamental distinctions between spot and futures trading is essential for navigating the cryptocurrency markets effectively.
Calculating the Break-Even Price of a Futures Position Including Fees
The break-even price in futures trading is the point where total revenue equals total costs, resulting in zero profit or loss. This calculation must account for all trading fees and, for perpetual contracts, dynamic funding fees.
Realized vs. Unrealized PnL in Futures Trading
In futures trading, understanding the distinction between realized and unrealized Profit and Loss is fundamental for assessing performance and managing risk.
Notional Value: Calculating the Nominal Value of a Futures Position
Notional value represents the total underlying value of a financial contract, such as a futures position, distinct from the actual capital a trader commits.