BackQuant Glossary
Funding Rate
The periodic payment between perpetual longs and shorts that keeps the perp price anchored to spot. Positive funding means longs pay shorts; negative means shorts pay longs. Crowded one-sided funding is one of the cleanest contrarian signals available.
Related terms
Long
A position that profits when price rises. Buying spot, going long a perp, owning a call, or being short a put are all long positions. Opposite of short.
Short
A position that profits when price falls. Selling spot, going short a perp, owning a put, or being short a call are all short positions. Short positions in crypto carry tail risk because upside is unbounded.
Spot
The current cash market price of an asset for immediate delivery. Spot is the underlying reference for derivatives pricing. Crypto spot trades 24/7 across hundreds of venues, with index prices aggregating across the deepest ones.
Futures
A standardized contract to buy or sell an asset at a set price on a future date. Crypto futures with fixed expiries exist alongside perpetual futures (perps) which never expire. Quarterly futures concentrate the most open interest.
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