Derivatives Glossary: Understand what you’re trading

in cryptocurrency •  5 years ago 

An agreement that gets its incentive from the exhibition of a fundamental resource. Since the subsidiary contract is a different money related item, its cost can hypothetically separate from the cost of fundamental resource.

This disparity is relieved with liquidation mechanics: the edge positions are exchanged at imprint value, which is determined from a basic resource cost. This makes it levelheaded for arbitrageurs to keep the costs of subordinate and basic near one another.

Source: https://medium.com/mark-price/derivatives-glossary-c249e69235b7

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