Glossary

Polymarket and Perps glossary

Short, exact definitions of the words traders meet on Polymarket and in perpetual futures. Click a term for the full explanation.

A

Auto-deleveraging: The last step of a Perps liquidation, in which the position is closed against the most profitable, most leveraged traders on the other side, off the order book. Read more about Auto-deleveraging

B

Builder code: An identifier of a builder's Polymarket profile that an app attaches to each order it sends, so matched trades and any builder fee are credited to that builder. Read more about Builder code

C

Chainlink Data Streams: A Chainlink price feed that Polymarket Perps can use, next to Pyth and Hyperliquid, as one of the outside sources behind a market's index price.
Collateral: The asset you put up to back a position or cover potential losses; on Polymarket, prediction markets and Perps both use pUSD (Polymarket USD) as collateral.
Conditional token: A Yes or No position token of the Gnosis Conditional Tokens framework (CTF), which some Polymarket markets use while others use Protocol V2 positions.
Cross margin: A margin mode where your cross positions share the account's collateral, so gains on one can support another and a liquidation can reach every cross position. Read more about Cross margin

D

DVM: UMA's Data Verification Mechanism, the token holder vote that decides a Polymarket resolution after it has been disputed twice.

F

FAK (fill and kill): Fill and kill: the order fills as much as it can at once and cancels the rest, and it is the default type of a market order in Polymarket's SDKs.
FOK (fill or kill): Fill or kill: the order must fill in full at once or it is canceled with no partial fill, and Polymarket offers it on prediction markets and on Perps.
Funding rate: The rate that sets the payment between longs and shorts on a perpetual: longs pay shorts while it is positive, and shorts pay longs while it is negative. Read more about Funding rate

G

GTC (good till canceled): Good till canceled: a limit order with no deadline that stays open until it fills or you cancel it, supported by Polymarket on prediction markets and Perps.
GTD (good till date): Good till date: a limit order active until an expiry time you set; Polymarket prediction markets end it slightly early and reject an expiry that is too close.

I

Index price: Polymarket's estimate of an underlying asset's fair value from outside price feeds, which funding is measured against and the mark price falls back to. Read more about Index price
Initial margin: The collateral needed to open or grow a leveraged position: its value divided by your leverage, with Polymarket Perps capping leverage in tiers by size.
Insurance fund: A reserve account that can take over a Perps position whose loss is too deep for the order book, with auto-deleveraging as the fallback when it cannot. Read more about Insurance fund
Isolated margin: A margin mode where one position is backed only by the collateral set aside for it, so a liquidation affects that position and not the rest of the account. Read more about Isolated margin

L

Leverage: The ratio of a position's size to the margin that backs it; on Polymarket Perps each market has a maximum leverage, and tiers lower the cap as a position grows.
Limit order: An order that trades at its price or better, with any unfilled part waiting in the book; on Polymarket prediction markets a market order is a limit order too.
Liquidation: The forced closing of a leveraged position when the account's equity falls below its maintenance margin, a margin ratio below one on Polymarket Perps. Read more about Liquidation

M

Maintenance margin: The least collateral that keeps a leveraged position open; on Polymarket Perps it is a flat share of the position value set by the market's maximum leverage. Read more about Maintenance margin
Maker: A trader whose resting order is later filled by another order; Polymarket itself charges makers no fee on prediction markets, although a builder fee can apply.
Mark price: The price Polymarket Perps use to value positions, check margin and trigger liquidation: the median of three candidates, so no single signal moves it alone. Read more about Mark price
Market order: An order that trades at once against the best resting orders; on Polymarket prediction markets it is a limit order priced to fill now, and it never rests.
Mid price: The halfway point between the best bid and the best ask, which Polymarket prediction markets display as the price unless the spread is wide.

N

Negative risk: A mechanism for events where only one outcome can win, in which a No share in one market can be converted into a Yes share in every other market of the event. Read more about Negative risk

O

Open interest: The total amount of positions still open in a market, not yet closed or settled; Polymarket publishes it for prediction markets and for each Perps market.
Optimistic Oracle: UMA's oracle that resolves most Polymarket event markets: a proposed outcome stands unless disputed, and a second dispute goes to a token holder vote. Read more about Optimistic Oracle
Order book: The live list of open buy orders (bids) and sell orders (asks) in a market; Polymarket prediction markets and Perps both match trades against an order book.
Outcome token: A token for one outcome of a market, such as Yes or No, that normally redeems in full if it wins and for nothing if it loses, unless the payout is split.

P

Perpetual contract: A derivative that tracks an asset's price like a future but never expires, kept near that price by funding payments; Polymarket Perps are perpetual contracts.
Post-only: An order flag that makes an order rest on the book only, so it is rejected if it would match at once; Polymarket supports it on prediction markets and Perps.
Price to beat: An Up/Down market's reference price, the Chainlink time-weighted average price (TWAP) at its start, which the closing TWAP must match or beat to resolve Up. Read more about Price to beat
pUSD: Polymarket USD, the collateral token for trading on Polymarket, a token on Polygon whose smart contract enforces its USDC backing. Read more about pUSD

R

Reduce-only: An order flag that lets an order only shrink or close a position, never open or grow one; Polymarket Perps reject a reduce-only order that would add exposure.
Resolution: The step that decides a market's winning outcome: UMA's oracle for most event markets, a Chainlink time-weighted average price (TWAP) for Up/Down markets.

S

Slippage: The gap between the price you expect and the price you get, often because a large order uses up the best resting orders, as Polymarket's documentation warns.
Spread: The gap between the best bid and the best ask in an order book, narrow in liquid markets; Polymarket normally displays the midpoint as the price.

T

Taker: A trader whose order matches orders already resting in the book; on Polymarket prediction markets that charge fees, the fee falls on takers, not makers.
Taker delay: A short hold on a marketable order before it is matched, used on some Polymarket markets, during which the order is pending and cannot be canceled. Read more about Taker delay
Tick size: The smallest step in which an order's price can move; Polymarket sets it per market, can change it, and rejects an order whose price is off that grid.
TWAP: A time-weighted average price: an asset's average over a lookback window, which Polymarket's crypto Up/Down markets use in place of a single price snapshot. Read more about TWAP

U

UMA: The provider of the Optimistic Oracle that Polymarket uses to resolve most event markets, where a resolution disputed twice goes to a vote of UMA token holders.
Up/Down market: A prediction market on whether an asset ends a time window at or above its starting reference price, decided by a Chainlink time-weighted average price (TWAP).

PolyTerminal is an independent interface for Polymarket and is not operated or endorsed by Polymarket. Orders placed through PolyTerminal carry PolyTerminal’s Polymarket builder code, and PolyTerminal may charge a builder fee on top of Polymarket’s own fees. Definitions are educational and are not investment advice.