Glossary

zUSDC: (aka lzUSDC, aka layer zero USDC) is USDC bridged to Aptos via the Layer Zero bridge. zUSDC is the only asset that can be used as collateral on Merkle Trade.

Long : Long means that the trader's position makes a profit when the price of the underlying asset rises.

Short : Short means that the trader's position makes a profit when the price of the underlying asset falls.

Market Order : Market Order is used when a trader want to place an order at the current market price. This is usually used when a trader wants their order to be executed immediately.

Limit Order : Limit Order is an order execution method used by traders when they want to open a position at a specified price. In the case of long limit, it works only at a lower price than current, and in the case of short limit, it works only at a higher price than current.

Collateral : Collateral is the margin required by traders to enter a position.

Position Size : Position Size means the total size of Positions a trader has. Simply put, position size is made up of collateral * leverage.

Stop Loss (SL) : Stop Loss is a function that can minimize traders' position loss. Stop loss is triggered when the mark price reaches the previously set price.

Take Profit (TP) : Take Profit is a function that can protect traders' position profits. Take profit is triggered when the mark price reaches the previously set price.

Mark Price : Mark Price is determined by multiplying the index price, which is the oracle price, by the price impact. As a long trader, it is favorable if the mark price is lower than the index price (=oracle price), and as a short trader, it is favorable if the mark price is higher than the index price.

Market Price : The market price is represented by the index price multiplied by the market_skew at which the trade is currently being made in merkle.trade. To be more precise, the formula would be index price*(1+MarketSkew/SkewFactor).

PnL : PnL stands for Profit and Loss and it refers to the amount of profit or loss that a trader has incurred on a particular position. Note that the PnL displayed on our frontend refers to the value excluding fees unless stated otherwise.

Price impact : Price impact is the difference between the price a trader expects to open a new position and the actual price. This can be similar to Slippage, but can be pre-calculated, determined by traders who have existing positions on Merkle Trade (That is, market skew). Click here to learn more about price impact!

Entry Price : Entry Price refers to the market price when a trader enters a specific position through a market order or limit order. Or, it represents the arithmetic average of the mark price when a trader enters a specific position several times.

Liquidation : Liquidation occurs when the trader's collateral falls below the required maintenance margin. It is a risk management measure to protect both the trader and the Merkle LP from excessive loss. click here to see more information.

Slippage : Slippage is the difference between the expected price and the execution price of a trade, and is also used to prevent front-running.

Open Interest : Open interest is a total number of "future contracts" held by traders who trade on Merkle Trade. On Merkle trade, there is open interest for each of the long and short sides. The total of traders' positions on the long side is displayed as open interest (L), and the total of traders' positions on the short side is displayed as open interest (S).

Max Open Interest : Max open interest means the maximum total value of positions that can be held in each direction. The reason it exists is to protect the Merkle LP when the market is extremely skewed in a certain direction and actually moves that way.