# Glossary of Terms

**Auto-Deleveraging (ADL):** A last-resort mechanism that automatically reduces the profitable positions of opposing traders to help cover losses in extreme market conditions.

**Backstop Liquidation:** A process where, if orderbook liquidity is insufficient to liquidate a position via market orders, the position (and remaining collateral) is transferred to a dedicated vault that systematically closes it.\
\
**Candle:** A visual summary of the stock's price action within a period of time, displaying the opening, closing, high, and low prices. Pacifica's candlestick charts are powered by [TradingView](https://www.tradingview.com/symbols/BTCUSD/).

**Collateral:** Funds deposited into your account to secure open positions.

**Cross Margin:** A margin mode that uses your entire account balance to support all open positions, improving capital efficiency.

**Funding Rate:** A periodic fee, updated every hour, exchanged between long and short positions to keep the perpetual contract price aligned with the underlying spot market.

**Impact Price:** The average execution price calculated for a predefined notional amount from the orderbook, used to determine the Premium Index.

**Initial Margin:** The required collateral to open a position, calculated as the position size multiplied by the entry price, divided by the leverage.

**Isolated Margin:** A margin mode where each position is allocated its own specific collateral, limiting risk to that individual position.

**Liquidation:** The forced closure of a position when its margin falls below the required maintenance level.

**Maintenance Margin:** The minimum collateral that must be maintained to keep a position open, typically set at half of the initial margin.

**Maker Order:** An order that adds liquidity to the order book, such as a resting limit order.

**Oracle Price (Mark Price):** An aggregated price calculated from multiple external sources (weighted median from major centralized exchanges or TWAP from decentralized exchanges) used to determine margin requirements, funding fees, and liquidation thresholds.

**Premium Index:** A measure of the deviation between the Impact Price and the Oracle Price, used in funding rate calculations.

**Taker Order:** An order that removes liquidity by executing against existing orders in the order book.

**Time-In-Force (TIF):** The instruction that determines how long an order remains active (e.g., Good-Til-Cancelled, Immediate-or-Cancel, Add-Limit-Only).

**TWAP (Time-Weighted Average Price):** A method to calculate an average price over a specific period to mitigate the impact of market volatility on execution.

**Withdrawal Controls:** Mechanisms that restrict collateral withdrawals during periods of extreme volatility to ensure open positions remain adequately funded.


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