Glossary

This glossary provides definitions specific to how terms are used within the platform. Some definitions may differ from traditional trading terminology to align with the platform's unique functionalities and strategies.

Algo Execution: Automated trading strategies that execute orders based on pre-defined algorithms within tread.fi, optimizing for speed, cost, or market impact.

Alpha Tilt: A parameter that skews the execution schedule, front-loading or back-loading trades based on market expectations.

Active Limit: A parameter that enables dynamic limit order placement, adjusting prices in real-time according to market conditions.

Arbitrage: A strategy that exploits price differences between markets or exchanges, facilitated through tread.fi multi-leg execution features.

Assets Under Management (AUM)/Total Equity: The current net worth of a portfolio, reflecting all assets and trading results. On the platform, "Assets Under Management (AUM)" visually tracks this historical value. Calculated as cash, stablecoins, current market value of spot holdings, and net unrealized PnL from open derivative positions.

Basis Trading: A strategy involving simultaneous buying of a spot asset and selling of a futures contract to profit from price discrepancies.

Cross-Exchange Arbitrage: Buying an asset on one exchange and selling it on another to exploit price differences, automated through tread.fi's smart order routing.

Directional Bias: Indicates a portfolio's overall tendency to profit from either upward (long bias) or downward (short bias) market movements, derived from the net notional value of open contracts. A positive bias signifies a net bullish stance, while a negative bias indicates a net bearish stance.

Discretion: A parameter that introduces controlled randomness into order execution, reducing predictability and minimizing detection by the market.

Dynamic Limit Spread: A setting that defines the minimum price difference required for executing spread trades, ensuring profitability thresholds are met.

Exposure Tolerance: Adjusts execution speed between legs in multi-leg trades to maintain balance and reduce market exposure when one leg fills faster than the other.

Funding Rate Arbitrage: A strategy that exploits differences in funding rates between perpetual swaps and spot markets.

Good 'Til Canceled (GTC): An order that remains active on the tread.fi platform until executed or manually canceled.

Gross Market Value (GMV): The notional value of all open positions, representing the aggregate size of assets controlled through leverage. Calculated as the sum of spot, cash, and absolute notional values of all open derivative contracts.

Iceberg Order: A large order split into smaller "slices" to reduce visibility and market impact, managed automatically by the tread.fi engine.

Immediate-Or-Cancel (IOC): An order that executes all or part immediately, with any unfilled portion canceled. The tread.fi Smart Order Router selects the best venue for execution.

Implementation Shortfall (IS): An execution trajectory designed to minimize the difference between the arrival price and the final execution price.

Limit Order: An order to buy or sell at a specified price or better.

Maker: A trader or order that adds liquidity to the market by placing limit orders that are not immediately filled, earning maker fees when executed.

Market Impact: The influence that large trades have on the price of an asset. tread.fi strategies aim to minimize this through intelligent execution.

Market Maker (Strategy): A strategy within tread.fi that places passive limit orders to reduce taker fees and minimize market impact. Unlike traditional market making, this strategy does not provide continuous bid-ask spreads.

Market Order: An order to buy or sell immediately at the best available price.

Max Clip Size: Defines the maximum size of individual passive orders in a larger trade to control visibility and execution speed.

Max OTC Percentage: The maximum portion of an order that can be executed through over-the-counter (OTC) channels.

Out-of-Limit (OOL) Pause: Pauses execution when the market price moves outside the set limit, preventing trades from executing at unfavorable prices.

Passive Only: A setting that ensures the engine only places maker orders, avoiding taking liquidity from the market.

Participation Rate: The percentage of total market volume a trader aims to participate in over a specified period.

Participation Rate Limit: Sets the maximum percentage of market volume an order can engage with at any time to prevent overexposure.

Pre-Trade Analytics: Insights provided before execution, including expected costs, participation rates, and market conditions, tailored to tread.fi's algorithms.

Reduce Only: Ensures that trades can only decrease an existing position, preventing accidental increases.

Smart Order Router (SOR): Directs orders to the exchange or liquidity venue offering the best price and execution conditions, a core feature of tread.fi.

Slices: Smaller portions of a parent order, automatically managed by the engine to minimize market impact and maintain order anonymity.

Spread Trade: A strategy involving the simultaneous buying and selling of related assets to profit from price differences, easily configured through tread.fi.

Statistical Arbitrage: Uses quantitative models to exploit pricing inefficiencies between correlated assets.

Strict Duration: Ensures execution stops at the set end time, regardless of whether the full target quantity has been completed.

Taker: A trader or order that removes liquidity from the market by executing against existing orders in the order book, typically incurring taker fees.

Target Participation Rate: A strategy that aims to maintain a consistent participation rate in the market without a fixed duration.

Target Time: A strategy that concentrates execution around a specific future event, optimizing for timing.

Time Weighted Average Price (TWAP): Executes orders at a steady rate over a specified period, regardless of market conditions.

Triangular Arbitrage: Exploits price discrepancies between three different assets within the same exchange.

Unrealized PnL (Profit & Loss): The theoretical profit or loss on open trading positions, based on current market prices versus entry prices. It is "on paper" and not yet realized by closing the position.

Volume Weighted Average Price (VWAP): Adjusts execution based on market volume to match or improve upon the market’s volume-weighted average price.