Trading glossary

Layer 1 Layer 1 Definition: Layer 1 (L1) refers to a base blockchain network that operates independently and processes transactions on its own protocol, rather than relying on other networks for security o... Layer 2 Layer 2 Definition: A Layer 2 (L2) is a secondary framework or protocol built on top of an existing blockchain (Layer 1) to increase transaction throughput and reduce costs, while ultimately settli... Legal Risk Legal Risk Definition: Legal risk is the potential for financial loss, operational disruption, or reputational damage arising from legal proceedings, regulatory actions, contract disputes, or chang... Leverage Leverage Definition: Leverage is the use of borrowed capital to amplify the potential returns and risks of a trading position, expressed as a ratio comparing total position size to deposited capita... Leverage in Trading Leverage in Trading Definition: Leverage in trading is the use of borrowed capital or margin to control a position larger than the trader's own deposited funds — amplifying both potential gains and... Liability Liability Definition: A liability is a financial obligation — a debt or duty that an entity owes to another party, requiring future payment of money, delivery of goods, or performance of services. ... Lightning Network Lightning Network Definition: The Lightning Network is a Layer 2 payment protocol built on top of Bitcoin that enables fast, low-cost transactions through a network of bidirectional payment channel... Limit Order Limit Order Definition: A limit order is an instruction to buy or sell an asset at a specific price or better — not at the current market price. A limit buy executes only at the specified price or ... Liquid Staking Liquid Staking Definition: Liquid Staking is a mechanism that allows cryptocurrency holders to stake their tokens in Proof-of-Stake networks while receiving liquid receipt tokens (LSTs) representin... Liquidation Price Liquidation Price Definition: The liquidation price is the specific price at which a leveraged position is automatically closed by the broker or exchange when the trader's margin equity falls below... Liquidity Liquidity Definition: Liquidity is the ease with which an asset can be bought or sold without significantly affecting its price, measured by trading volume, order book depth, and bid-ask spread tig... Liquidity Pool Liquidity Pool Definition: A Liquidity Pool is a smart contract containing locked cryptocurrency tokens that enables decentralized trading by serving as both the source of tokens for swap operation... Listing Listing Definition: In financial markets, a listing is the admission of a security — a stock, ETF, bond, or cryptocurrency — to trading on an exchange, making it officially available to buyers and ... Litecoin (LTC) Litecoin Definition: Litecoin is a cryptocurrency created in 2011 by Charlie Lee as a lighter alternative to Bitcoin. It uses the same proof-of-work consensus as Bitcoin but with different paramete... Long Position Long Position Definition: A long position is the purchase of an asset with the expectation that its price will rise — the trader profits when the price increases and loses when it falls. Going long... Lot Size Lot Size Definition: Lot size is the standardized unit of measurement for a tradable instrument, defining the minimum quantity that can be traded as a single position in a given market. In forex, o... Low-Risk Investment Low-Risk Investment Definition: A low-risk investment is one with high probability of preserving capital and generating predictable returns, accepting lower expected returns as the cost of reduced ... Lower High / Lower Low Lower High / Lower Low Definition: Lower High (LH) and Lower Low (LL) describe the fundamental price structure of a downtrend, where each successive peak falls below the previous peak (lower high) ...