Glossary of Terms
This glossary defines key terms used throughout the MegaTAO documentation and trading platform.
A
Alpha Token
On the Bittensor network, each subnet has a tradeable token colloquially called "Alpha tokens." These are the underlying assets traded on MegaTAO as perpetual futures derivatives.
Arbitrage
Trading strategy that exploits price differences between markets or assets to generate risk-free profits.
Ask Price
The lowest price at which a seller is willing to sell an asset. Also known as the offer price.
Auto-Deleveraging
Protocol mechanism that automatically reduces leverage when positions become too risky to protect the protocol.
B
Bid Price
The highest price at which a buyer is willing to buy an asset.
Bid-Ask Spread
The difference between the bid price and ask price. Represents the cost of immediate execution.
Bittensor EVM
Ethereum-compatible layer built on the Bittensor network that enables smart contract functionality.
C
Collateral
Assets deposited as security for leveraged positions. On MegaTAO, all collateral is in TAO tokens.
Cross-Asset
Trading strategy that involves multiple assets, often based on correlation analysis between different Alpha tokens.
D
Delta Neutral
Trading strategy that aims to profit from funding while minimizing directional risk by balancing long and short positions.
Delta Oracle
Multi-oracle consensus system that provides reliable price feeds for Alpha tokens from the Bittensor mainnet.
E
Entry Price
The price at which a position is opened.
Exit Price
The price at which a position is closed.
F
Funding Rate
Periodic payment between long and short positions to keep perpetual futures prices aligned with spot prices. Occurs every 8 hours.
Funding Payment
Actual payment made based on the funding rate. Longs pay shorts when the rate is positive, and vice versa.
G
Gas
Unit of computation on the Bittensor EVM network. Gas costs are paid in TAO tokens.
Gas Limit
Maximum amount of gas that can be used for a transaction.
Gas Price
Price per unit of gas, paid in TAO tokens.
H
Hedging
Strategy to reduce risk by taking offsetting positions in related assets.
I
Initial Margin
Collateral required to open a leveraged position. Calculated as Position Size ÷ Leverage.
Insufficient Margin
Condition when account balance is below the required margin for a position or new trade.
L
Leverage
Multiplier that determines position size relative to margin. Higher leverage means larger positions with less collateral.
Liquidation
Automatic closure of a position when margin ratio falls below the maintenance margin requirement (20%).
Liquidation Price
Price at which a position will be automatically liquidated. Calculated based on entry price, leverage, and maintenance margin.
Long Position
Position that profits when the underlying asset price rises. Also known as a buy position.
Liquidity
Measure of how easily an asset can be bought or sold without significantly affecting its price.
M
Maintenance Margin
Minimum margin required to keep a position open. Set at 20% of position value on MegaTAO.
Margin
Collateral deposited to open and maintain leveraged positions.
Margin Call
Warning that margin ratio is approaching dangerous levels, requiring additional margin or position closure.
Margin Ratio
Percentage of margin remaining relative to position value. Calculated as (Position Value - Unrealized Loss + Available Margin) / Position Value.
Market Maker
Trader who provides liquidity by placing orders on both sides of the market, profiting from bid-ask spreads.
Market Order
Order that executes immediately at the current market price.
MEV (Maximal Extractable Value)
Value that can be extracted from block production by reordering, including, or excluding transactions. MEV protection will be introduced after the Beta period.
O
Open Interest
Total value of all open positions in a particular asset.
Order Book
Display of all pending buy and sell orders for an asset, showing prices and quantities.
Oracle
System that provides external data (like prices) to smart contracts. MegaTAO uses the Delta Oracle system.
P
Perpetual Futures
Derivatives contracts that never expire, allowing traders to hold positions indefinitely (subject to funding costs).
Position
Open trade that represents exposure to an asset. Can be long (bullish) or short (bearish).
Position Size
Total dollar value of exposure to an underlying asset.
P&L (Profit and Loss)
Measure of the financial performance of a position or portfolio.
R
Realized P&L
Actual profit or loss from a closed position.
Risk-Reward Ratio
Ratio of potential profit to potential loss for a trade. Used to evaluate trade quality.
S
Short Position
Position that profits when the underlying asset price falls. Also known as a sell position.
Slippage
Difference between expected execution price and actual execution price, often due to market movement during order processing.
Spot Price
Current market price of an asset for immediate delivery.
Stop Loss
Order that automatically closes a position when price moves against the trader by a specified amount.
Stop Order
Order that becomes a market order when a specified price level is reached.
Support
Price level where buying interest is expected to emerge, preventing further price declines.
Synthetic Position
Position that tracks asset price movements without holding the actual underlying asset.
T
TAO
Native token of the Bittensor network, used as collateral and for gas fees on MegaTAO.
Take Profit
Order that automatically closes a position when price moves in favor of the trader by a specified amount.
Technical Analysis
Method of analyzing price movements and patterns to predict future price direction.
Trailing Stop
Stop loss order that automatically adjusts as price moves favorably, locking in profits while limiting losses.
U
Unrealized P&L
Current profit or loss on an open position, based on the difference between entry price and current market price.
Uptrend
Series of higher highs and higher lows, indicating an upward price trend.
V
Vault Model
Trading model where the protocol vault first attempts to match orders through an orderbook, and if no match is found, acts as the counterparty to trades, providing liquidity and simplifying execution.
Volatility
Measure of price fluctuation over time. Higher volatility means larger price swings.
Volume
Number of shares or contracts traded in a security or market during a given period.
W
Web3
Decentralized web technologies that enable peer-to-peer interactions without intermediaries.
WebSocket
Communication protocol that provides full-duplex communication channels over a single TCP connection, used for real-time data updates.
Note: This glossary covers the most commonly used terms in MegaTAO trading. For more specific terms or detailed explanations, refer to the relevant sections of the documentation.
Last updated