derivatives

Simultaneously buying a spot asset and selling a futures or <a href="/en/glossary/derivatives/perpetual-contract/">Perpetual Contract</a> on the same asset, locking in the price gap (the basis) between the two as profit — a direction-neutral strategy that exploits the price discrepancy between spot and derivatives markets, distinct from <a href="https://crypto-bible.com/en/glossary/derivatives-and-leverage/funding-rate-arbitrage/" target="_blank" rel="noopener">Funding Rate Arbitrage</a>.

Combining multiple positions (such as spot and futures, or options in different directions) so the overall portfolio's sensitivity to the underlying asset's price movement approaches zero, thereby shifting the profit source away from pure directional judgment toward other, more nuanced market variables — the common core principle underlying both <a href="https://crypto-bible.com/en/glossary/derivatives-and-leverage/funding-rate-arbitrage/" target="_blank" rel="noopener">Funding Rate Arbitrage</a> and basis trading.

A mechanism perpetual contracts use to keep the contract price closely tracking the spot price over time — the side whose position direction matches the market majority periodically pays a fee to the opposite side, using economic incentive to pull the contract price back into a reasonable range.

An on-chain vault product that automates an options-selling strategy (most commonly a covered call), letting depositors earn yield from selling option premiums without needing to understand options trading themselves, while bearing the corresponding strategy risk.

A derivatives contract with no expiration date that can be held indefinitely, letting traders speculate on an asset's price with <a href="https://crypto-bible.com/en/glossary/derivatives-and-leverage/leverage/" target="_blank" rel="noopener">Leverage</a>, using a <a href="/en/glossary/derivatives/funding-rate/">Funding Rate</a> mechanism to keep the contract price closely tracking the spot price over time.

A decentralized exchange specializing in offering <a href="/en/glossary/derivatives/perpetual-contract/">Perpetual Contract</a> trading, letting users open a leveraged position, speculate directionally, or hedge directly through a smart contract, without needing a centralized exchange or handing assets over to any third-party custody — the concrete venue where the perpetual contract mechanism covered in an earlier article gets implemented under a decentralized architecture.

The gap between a <a href="/en/glossary/derivatives/perpetual-contract/">Perpetual Contract</a>'s current trading price and the spot market price at the same moment — this gap itself is two sides of the same coin as the <a href="/en/glossary/derivatives/funding-rate/">Funding Rate</a> covered in an earlier article: the larger the basis deviates, the more imbalanced the market's long-short forces, and the funding rate mechanism exists as the concrete tool continuously pulling this gap back close to zero.

An on-chain <a href="https://claude-me.com/en/glossary/core-concepts/token/" target="_blank" rel="noopener">Token</a> that uses smart contracts and a collateral mechanism to track and mimic the price performance of an underlying asset (such as a stock, gold, or fiat currency), letting users gain price exposure without actually holding that asset.