BackQuant Glossary
Bid-Ask Spread
The gap between the highest current buy order (bid) and the lowest current sell order (ask) on an order book. Tight spreads indicate deep liquidity and competitive market making. Wide spreads indicate stress, low activity, or thin books.
Related terms
Order Book
The list of all current resting buy and sell orders at every price level. Depth, imbalance, and refresh patterns are the core inputs to microstructure analysis. The order book tells you how much liquidity exists at each level before slippage.
Backwardation
A market structure in which near-dated contracts trade at higher prices (or higher implied volatilities) than longer-dated contracts. In futures, backwardation often signals near-term scarcity. In options IV term structure, backwardation signals an imminent catalyst or active stress in the market.
Basis
The difference between a futures or perpetual price and the underlying spot price. Positive basis means futures trade at a premium to spot; negative basis (sometimes called inverse basis) signals near-term selling pressure or fear. Cross-venue basis arbitrage is a core strategy in crypto market making.
BTC
Bitcoin, the largest crypto asset by market cap. The dominant underlying for crypto options, with the deepest options market on Deribit. BTC options open interest typically exceeds the rest of the crypto options market combined.
Bybit
A major centralized derivatives exchange. Originally known for perpetual futures, Bybit has grown into a meaningful options venue and a primary aggregation source for crypto positioning data.
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