Glossary

Odyssey Specific

Hook Chain: A custom-built Arbitrum Orbit Chain that powers Odyssey.

Session Signatures: Session signatures are used to sign transactions on a trader’s behalf. Traders will be prompted to create a session signature every 7 days so transactions can be instantly confirmed instead of needing to sign a transaction in a wallet for every transaction on Odyssey.

Off-Chain Orderbook: A list of all open buy and sell orders in a market. Odyssey's orderbook is off-chain, which benefits traders through speed, low-cost transactions, and efficiency.

Market Neutral Liquidity Pools: Odyssey’s pools allow depositors to get exposure to market-making returns without needing to take a single-direction approach (ex: long or short). The pools place limit orders on Odyssey's perpetual futures. Each pool provisions liquidity to a specific market, allowing LPs to gain exposure to volumes and volatility on individual collections or across the whole market by diversifying.

Accounts/Markets:

Primary Account: Your main account on Odyssey. When depositing funds to Hook Chain, this is where your funds will be deposited. Transfer funds from your Primary Account to a Margin Account to start trading in that market.

Margin Account(s): An account for a specific market on Odyssey, containing its isolated balance and positions. Each margin account may only hold positions in a single market at once.

Derivatives:

Equity: The total value of your open positions and collateral.

Margin Usage: The percentage of the maximum position size currently open in a margin account. If the margin usage is above 100%, the account can be liquidated.

Index Price: The current price of an asset based on spot marketplaces, which is derived from Odyssey’s oracle.

Mark Price: The price an asset is currently trading at on Odyssey. This is calculated as a price-impact mid-market price. For perpetual futures, the mark price is constrained to not deviate more than 10% from the index price.

Liquidation Price: The price at which all positions held within a single margin account are subject to liquidation. Add more collateral to the account in the market you are trading in to make a liquidation less likely.

Spread: The difference between the best bid and the best offer in Odyssey's orderbook.

Top Bid: The highest price a buyer is willing to pay for a position.

Top Ask: The lowest price a seller is willing to sell a position.

Order Types

Market Order: An order type allowing a trader to purchase an option or perpetual future immediately. Market orders will fill the top bid(s) (short/sell) or the top ask(s) (long/buy). When placing a market order, it’s important to ensure there is enough depth in the order book so your fill price is close to the index price (or current floor price).

Limit Order: An order type allowing a trader to purchase an option or perpetual future at a specific price. The order will not be filled until the limit price is reached.

Perpetual Futures:

Perpetual Future (Perp): A derivative designed to track the price of an asset, allowing traders to speculate on the asset’s value without owning it. Perps never expire meaning a trader’s position will remain open until they close it or are liquidated.

Funding Rate: Perpetual futures utilize a mechanism called the funding rate, where one side of the trade (long or short) pays the other a small hourly payment to keep the position open. The goal of the funding rate is to incentivize traders to buy or sell the perp contract, pushing the price back towards the index. Funding payments impact account equity, so they may cause a liquidation.

Positive Funding: When the mark price > the index price, short traders pay long traders a funding rate.

Negative Funding: When the index price > the mark price, long traders pay short traders a funding rate.

Leverage: Using borrowed funds to get more price exposure to an asset. For example, if you long a Milady perp with 10x leverage, you will increase your potential returns by 10x. Increased leverage increases liquidation risk. If the price moves in the opposite direction as your trade, you can be liquidated faster.

Options:

Call Option: A type of derivative that grants the holder the right but not the obligation to purchase the underlying asset at a specified price at a specified time in the future.

Put Option: A type of derivative that grants the holder the right but not the obligation to sell the underlying asset at a specified price at a specified time in the future.

Strike Price: The minimum price of an option for it to be in the money.

Expiration Date: The date when the option can be exercised.

Premium: The purchase price of an option.

Breakeven Price: The price at which the option holder breaks even.

American Options: A type of option that can be exercised on or before its expiration date.

European Options: A type of option that only can be exercised on its expiration date.

In the Money: The option is currently profitable because the underlying asset's index price is higher than the strike price.

At the Money: The option is net zero profit because the underlying asset's index price is equal to the strike price.

Out of the Money: The option is unprofitable because the underlying asset's index price is lower than the strike price.