BackQuant Glossary
Put Option
A contract giving the holder the right to sell the underlying at a fixed strike price before or at expiry. Buyers profit when the underlying falls below the strike minus premium paid. Most commonly used as downside protection.
Related terms
Premium
The price of an option, paid by the buyer to the seller. Premium consists of intrinsic value plus time value. In a separate sense, basis premium refers to futures or perp prices trading above spot.
Expiry
The date and time at which an options contract settles. After expiry, an option pays out its intrinsic value or expires worthless. Crypto options on Deribit expire Fridays at 08:00 UTC.
Strike Price
The fixed price at which an option contract can be exercised. Calls are profitable above the strike; puts are profitable below. Strike concentration drives the shape of gamma exposure and identifies key levels like call walls and put walls.
Perpetual Swap (Perp)
A futures contract with no expiry, anchored to spot via funding payments between longs and shorts. Perps are the dominant derivative in crypto, vastly larger in volume than dated futures. BTC and ETH perps trade 24/7 across every major venue.
Position Sizing
The amount of capital allocated to a trade, usually expressed as a percentage of account or as risk per stop distance. Disciplined position sizing is the difference between surviving drawdowns and blowing up.
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