Learning guide
Derivatives, Margin, and Liquidation Language
A beginner guide to mark price, index price, open interest, insurance funds, maintenance margin, and ADL queues.
Derivatives terms describe exposure
A derivative can give exposure to an asset without requiring direct ownership of the asset. Perpetual futures and margin products use specialized vocabulary because positions can be opened, funded, marked, and liquidated in ways that differ from a simple spot trade.
Learning the words does not make the product safe. It simply helps a reader understand warnings, dashboards, and documentation before confusing one metric for another.
Mark price and index price
An index price is usually built from reference markets. A mark price is often used by a venue to value positions and reduce unnecessary liquidations during short-term price spikes.
The distinction matters because liquidation systems may use mark price rather than the last traded price. A beginner who only watches the visible chart may miss how the risk engine is valuing the position.
Margin buffers and backstops
Maintenance margin is the minimum collateral level needed to keep a leveraged position open. If the buffer is too small, the position may be liquidated. Insurance funds and ADL queues are backstop mechanisms that can appear when losses exceed available collateral.
These terms belong together because they explain what happens when leverage meets fast price movement and limited liquidity.
How this appears in the game
A derivatives risk group may contain mark price, index price, open interest, insurance fund, maintenance margin, or ADL queue. The shared theme is risk accounting around leveraged exposure.
Crypto Term Game does not teach trading strategies. It teaches vocabulary so readers can recognize the meaning of risk labels.