Futures terminology describes how exposure, collateral and risk are calculated. Misunderstanding one field can lead to a position much larger or more expensive than intended, so vocabulary should be learned before strategy.
Exposure terms
Notional value is the total contract exposure. Leverage compares exposure with required collateral. Position size may be displayed in coins, contracts or settlement currency depending on product specifications.
Margin terms
Initial margin is required to open exposure, while maintenance margin is the minimum equity required to keep it. Isolated margin assigns collateral to a position; cross margin can draw from broader account equity.
Profit and pricing terms
Unrealized PnL changes with the reference price while a position is open. Realized PnL reflects closed results, commonly after fees. Last, index and mark prices serve different purposes and may diverge during volatility.
Funding and basis
Funding is a periodic transfer between long and short holders. Basis is the difference between derivative and spot prices. Positive funding commonly means longs pay shorts, but traders must check the contract rules.
Risk terms
Liquidation is forced risk reduction when margin is insufficient. Slippage is the difference between expected and average execution. Auto-deleveraging may reduce profitable opposing positions in exceptional conditions. Knowing the definitions is only the start—verify how MEXC calculates each value for the selected contract.
Worked terminology example
A $5,000 notional position backed by $500 has 10x effective leverage at entry. A 1% adverse move represents roughly $50 before fees, or 10% of the posted margin. Maintenance requirements mean liquidation can occur before a simple 10% underlying move. This is why notional value matters more than the small collateral number.
Frequently asked questions
Is margin the maximum possible loss?
Not necessarily; rules, fees and account mode determine exposure.
Is mark price executable?
It is primarily a reference calculation. Actual orders execute against available liquidity.
Does positive PnL include funding?
Displays vary. Check realized history for net fees and funding.
Final takeaway
Translate every interface field into money at risk. If a term remains unclear, consult current contract documentation before trading.