Glossary

Definition

Binding short definitions for terms used across the KB that do not carry their own entries. Where a term HAS an entry, the entry governs; this page exists so no cross-reference dangles and agents share one vocabulary. Terms are grouped, each definition self-contained.

How it works / structure

Market mechanics

• Open interest (OI): outstanding contracts not yet closed or exercised; volume is turnover, OI is inventory. Rising OI with rising volume = new positioning; volume without OI change = churn (ms-option-chain).
• Contango / backwardation: futures curve upward-sloping / downward-sloping vs spot; the roll-yield sign for a long position (ms-futures-roll).
• Basis: spot minus futures (sign conventions vary by market; the platform pins spot − front future).
• Mark-to-market: daily revaluation at settlement prices; futures cash-flow variation margin daily.
• Notional: the position’s full economic size (contracts × multiplier × price) — the platform sizes on notional, never on margin posted.
• Float: shares available for public trading (outstanding minus insider/restricted holdings).
• Halt / LULD: exchange trading pauses; limit-up/limit-down bands pause trading at percentage moves — stops do not execute through a halt.

Options vocabulary

• Pin risk: uncertainty at expiration when the underlying closes at/near a short strike — assignment is unknowable until after the close; the position may or may not convert to stock overnight (ms-expiration-exercise-assignment).
• Theta decay curve: time value’s decay path — near-the- money decay accelerates into expiry (steepest final weeks), while far OTM/ITM decay flattens; the shape is why DTE floors exist (mgmt-time-based-exit, greek-theta).
• Extrinsic / intrinsic value: intrinsic = in-the-money amount; extrinsic = premium minus intrinsic (time value + volatility value); early-assignment logic runs on extrinsic (opt-dividend-effects).
• Moneyness: strike vs spot classification (ITM/ATM/OTM); delta is the platform’s continuous moneyness coordinate.
• Leg / legging: one component of a multi-part structure; legging = executing components separately (bearing intermediate risk) vs a single spread order.
• Roll: close one contract, open a related one, one decision (mgmt-rolling; futures: ms-futures-roll).
• Credit / debit: net premium received / paid at entry.
• Assignment / exercise: the short is assigned when the long exercises; American style any time, European at expiry only (ms-expiration-exercise-assignment).

Risk & performance vocabulary

• Drawdown: peak-to-trough equity decline; max drawdown is the worst such over a window (risk-max-drawdown-budget).
• Sharpe ratio: mean excess return over its standard deviation — scale-free risk-adjusted return; fragile to non-normal distributions (a short-premium program’s Sharpe overstates until the tail arrives).
• R-multiple: P&L as a multiple of initial planned risk (entry-to-stop distance) — the platform’s per-trade outcome unit (mgmt-profit-target).
• Expectancy: mean per-trade R over a sample; positive expectancy after friction is the minimal strategy claim.
• Slippage: execution price minus decision price (ms-slippage-friction).
• Hit rate / win rate: fraction of trades positive — meaningless without payoff shape (a 90% hit rate with −10R losses is expectancy-negative).
• Skew (distribution): asymmetry of the outcome distribution; premium selling is negatively skewed (many small wins, rare large losses), trend following positively (the platform requires strategies to state their skew).

Crypto vocabulary

• Funding rate: the periodic payment between perpetual- futures longs and shorts that tethers the contract to its spot index; positive = longs pay (crypto-perpetual-futures).
• Mark price: the index-anchored price derivatives venues margin and liquidate against, distinct from last trade (crypto-perpetual-futures).
• Liquidation cascade: forced position closes pushing price into further forced closes — the endogenous amplifier in leveraged crypto markets.
• Seed phrase: the mnemonic word list from which a wallet derives all its keys; a complete portable copy of everything it controls (crypto-wallets-keys).
• Cold / hot wallet: key storage offline / online — the security-vs-convenience axis of self-custody (crypto-custody-models).
• Depeg: a stablecoin trading materially away from its reference value (crypto-stablecoins).
• Halving: bitcoin’s scheduled 50% cut to per-block issuance, every 210,000 blocks (crypto-supply-schedules).
• Confirmation: a transaction’s inclusion depth under subsequent blocks; venues credit deposits after asset- specific confirmation counts (crypto-transfer-settlement).
• On-chain: recorded on the public ledger itself, as opposed to venue-internal ledger entries (crypto-onchain-metrics).
• Reference rate: a methodology-governed aggregation of venue prices used for settlement and NAV (e.g. the CME CF rates; crypto-spot-market-structure).

Platform-specific usage

• Replay: deterministic re-execution of a strategy over recorded data — the platform’s evidence standard for any performance claim.
• Falsifier: the pre-declared observation that would prove a thesis wrong; every thesis carries one (qualitative-analysis).
• Folklore: a widely-repeated trading claim lacking a citable test — documented, labeled, never load-bearing.
• Priced expectation: what the market already implies (consensus, expected move, implied path) — the benchmark every event thesis is measured against (lens-event-catalyst).

When it applies

Vocabulary resolution for every entry; the import layer treats these definitions as binding for term normalization.

Risk profile & failure modes

• Definition drift: agents importing outside definitions for these terms create silent inconsistencies — this page governs; conflicts get resolved by editing HERE, versioned.
• Glossary bloat: terms that grow their own evidence and parameters graduate to full entries; the glossary holds definitions only.

Evidence & limits

Definitions align with SEC investor-education usage and OCC options vocabulary where those sources define the term; platform-specific terms (replay, falsifier, folklore, priced expectation) are defined by this KB and carry no external authority claim.

Falsifiable-thesis examples

Not applicable — definitions carry no claims; the one testable property is internal consistency (no entry uses a glossary term in a conflicting sense), which the validator’s cross-reference pass approximates.

Cross-references

• Governing entries where they exist: ms-option-chain, ms-futures-roll, ms-expiration-exercise-assignment, mgmt-rolling, risk-max-drawdown-budget, ms-slippage-friction
• Platform doctrine terms: qualitative-analysis (falsifier), lens-event-catalyst (priced expectation), lens-quantitative (replay discipline)

Owner display renames

Old display term	New display term
Outcome log	Simulation Results
Strategy	Trade Entry Strategy (never bare "strategy" in labels)
Style	Trade Management Strategy
Doctrine	Theory — the container; items typed: finding (what the evidence said) and principle (a finding promoted into an operating rule)
Sponsored/Anchor community	Official community (identity chip stays "Verified brand")
"book"	retired — the thesis IS the umbrella; hierarchy reads portfolio → thesis → trades
"frozen" (evidence)	immutable — "immutable evidence"; the verb "freeze" becomes "make immutable"

Anti-confusion litmus: thesis vs Theory — does it have a ticker on it? Portfolio vs Theory — close every trade and the Theory is unchanged.

Banned words

Never "bet" / "betting" / "wager" / "gamble" or any gambling proxy, in any prose — site, UI, docs, agent output, legal copy where user-facing. Replacements by context:

• "commit capital to" (a thesis)
• "the claim" (entry-card framing)
• "commitments" / "positions" (portfolio contents)
• "structure" / "exposure" (options slang like "range bet" / "convexity bet")