Crypto Perp Glossary — Sharpe, Drawdown, HIP-3, Liquidation
Plain-English definitions for every term you need to copy trade on Hyperliquid: Sharpe ratio, max drawdown, HIP-3, IOC order, liquidation, funding rate, basis and more.
structure
- Agent wallet
A dedicated wallet created per copy strategy, non-custodial by design. - AMM
Mechanism that prices trades against a liquidity pool rather than an order book. - Basis
The difference between the perp price and the spot price. - Copy trading
Automatically mirroring the trades of a target trader with your own capital. - Funding rate
Periodic payment between longs and shorts that anchors a perp's price to spot. - HIP-3
Hyperliquid Improvement Proposal 3 — permissionless builder-deployed perpetual markets. - Holding period
Average time a position is held from open to close. - KYC
Know-Your-Customer identity verification, typically required by centralized exchanges. - Long
Bet on price going up. - Mirror trading
See: copy trading. - Non-custodial
The platform does not hold user funds; users keep withdrawal control. - Order-book DEX
Decentralized exchange that uses a central limit order book. - Perp
Futures contract with no expiry, settled continuously via funding rate. - Perpetual futures
See: perp. - Short
Bet on price going down. - Sign-In with Ethereum
Authentication standard where users sign a message with their wallet to prove control. - Social trading
Broad term for trading platforms that surface other traders' positions and PnL. - Vault
Pooled-capital strategy that traders can deposit into.
metrics
- Alpha
Return generated above a benchmark, attributable to skill rather than market exposure. - Beta
Sensitivity of a strategy's returns to a benchmark's returns. - Calmar ratio
Annualized return divided by absolute max drawdown. - Consistency score
Measure of how stable a trader's daily PnL is over time. - Leaderboard
Ranking of traders by some performance metric. - Sharpe ratio
Risk-adjusted return: average return above the risk-free rate divided by the standard deviation of returns. - Sortino ratio
Like Sharpe ratio but only penalizes downside volatility. - Trader quality score
A composite metric whale.ag computes from on-chain fills to rank traders. - Win rate
Percentage of trades that closed at a profit.
risk
- Cross margin
Margin shared across all positions in an account. - Isolated margin
Margin allocated to a single position; loss is capped at the isolated amount. - Leverage
Notional position size divided by margin posted. - Liquidation
Forced closure of a leveraged position when equity falls below maintenance margin. - Maintenance margin
Minimum equity required to keep a leveraged position open. - Margin
Capital posted as collateral for a leveraged position. - Max drawdown
The largest peak-to-trough decline of an equity curve, as a percentage of the peak. - Stop-loss
Order or rule that closes a position when loss exceeds a threshold.
execution
- Drift reconciliation
Process of detecting and correcting divergence between a copier's positions and the target trader's. - Fill
An executed order match — a trade that hit the book and was settled. - IOC order
A taker order that fills as much as possible immediately and cancels any unfilled remainder. - Post-only order
A maker-only order that is rejected if it would cross the spread. - Slippage
Difference between expected fill price and actual fill price. - Take-profit
Order that closes a position when profit reaches a target. - WebSocket mirroring
Real-time copy trading where the platform subscribes to the target's fills via WebSocket and mirrors them.