> ## Documentation Index
> Fetch the complete documentation index at: https://staging-docs.orderly.network/llms.txt
> Use this file to discover all available pages before exploring further.

# Glossary

> Review definitions of key trading terms used across Orderly, from order book to ADL.

**Order Book:** A live list of all open buy and sell orders for an asset, sorted by price. It shows you what other traders are willing to pay or accept.

**Liquidity:** How much of an asset is available to trade. Higher liquidity means you can buy or sell more easily without moving the price.

**Spread:** The gap between the highest buy price (bid) and the lowest sell price (ask). A smaller spread usually means a more liquid market.

**Basis Point (BP):** A tiny unit of measurement: 1 basis point = 0.01%. Used to express fees and rate changes precisely.

**Taker Fee:** The fee you pay when your order fills immediately, removing liquidity from the order book (e.g., a market order).

**Maker Fee:** The fee or rebate applied when your order adds liquidity to the order book by waiting to be filled (e.g., a limit order that doesn't match right away). Builder base maker fees can be negative for eligible Builder tiers; user-facing maker fees are set by each Builder and can also be negative, which entitles qualifying maker trades to a rebate.

**Unsettled PnL:** Profit or loss from a perp position that hasn't been settled yet. Settlement transfers USDC between winning and losing positions.

**Maintenance Margin:** The minimum collateral you must keep in your account to avoid liquidation. If your margin drops below this level, your position gets liquidated.

**Initial Margin:** The collateral required to open a new position. The exact amount depends on the market and the leverage you choose.

**Funding Fee:** A periodic payment between long and short traders that keeps perp prices close to the actual market price of the underlying asset. Learn more [here](/introduction/trade-on-orderly/perpetual-futures/funding-rate).

**Cost Position:** Your average entry price plus any fees you've paid (trading fees, funding fees). This is what's used to calculate your unrealized PnL.

**Mark Price:** A fair-value estimate for a perp contract, calculated from prices across multiple spot exchanges. It's designed to be stable and resistant to manipulation, and it's the price used to determine liquidations. Learn more [here](/introduction/trade-on-orderly/perpetual-futures/mark-price-index-price-and-last-price#mark-price).

**Index Price:** The volume-weighted average price of an asset across major spot exchanges. Learn more [here](/introduction/trade-on-orderly/perpetual-futures/mark-price-index-price-and-last-price#index-price).

**Last Price:** Simply the most recent price at which a trade was executed.

**Open Interest:** The total number of outstanding perp contracts that haven't been closed. It's a measure of how active a market is, denominated in USDC.

**Liquidation:** When your collateral falls too low to support your position, the system forcibly closes it to prevent further losses.

**Auto De-leveraging (ADL):** A safety mechanism that kicks in when normal liquidation can't fully close a position. It automatically reduces opposing positions to keep the system solvent. Learn more [here](/introduction/trade-on-orderly/perpetual-futures/insurance-fund-and-adl#adl-auto-deleveraging).

**Insurance Fund:** A reserve pool that covers losses when a liquidated position can't be fully absorbed by liquidators. It's funded by liquidation fees and by Orderly. Learn more [here](/introduction/trade-on-orderly/perpetual-futures/insurance-fund-and-adl).