# Glossary

The terms used across rangebound, in plain language first and precise language second.

## Liquidity and pools

**Concentrated liquidity (CLMM).** A pool design where each LP chooses a price range to provide liquidity in. Capital only earns fees while the price is inside that range, and earns far more per dollar than liquidity spread across all prices. Raydium CLMM and Orca Whirlpools both work this way.

**Pool.** One market for a pair of tokens at one fee tier, for example NVDAx/USDC at 0.10%. An asset can have several pools across venues, issuers and fee tiers.

**Fee tier.** The share of each swap paid as a fee, for example 0.10%. Some Raydium pools add a dynamic surcharge when the price is moving fast.

**TVL (total value locked).** Everything deposited in a pool, in dollars, whether in range or not.

**Active TVL.** The part of TVL held by positions whose range covers the current price. Only this liquidity earns fees right now.

**Tick.** The smallest price step a pool recognises. Ranges start and end on ticks, and liquidity is counted tick by tick.

**Position.** One LP's deposit in one pool over one range. On Raydium and Orca each position is an NFT, so it has an address and an owner.

**In range / out of range.** A position is in range while the pool price sits between its lower and upper price. Out of range, it holds only one token and earns nothing.

**Width.** How wide a range is, written as ± around its middle. ±1% runs from about 1% below to 1% above the centre. On rangebound, tight means ±1% or narrower and wide means more than ±5%.

**Re-centring.** Closing a range that the price has left and opening a new one around the current price.

## Returns

**Fee APR.** Fees paid to LPs over a window, divided by the pool's TVL, as a yearly rate. It describes the pool as a whole, not a concentrated position.

**Active APR.** Fee APR measured on active TVL instead of all TVL: what the liquidity actually earning is being paid.

**Net APR.** What a $10,000 range kept centred on the price would have earned after fees, LVR and re-centring costs, at its best width. See [LVR and re-centring costs](../methodology/lvr-and-recentring.md).

**Divergence.** The gain or loss of a position against simply holding the tokens that were deposited. Often called impermanent loss.

**Price effect.** How much the deposited tokens themselves rose or fell in dollars, whether or not they were in a pool.

**P&L.** On rangebound, a position's fees plus its divergence: what LPing added over holding. Total P&L adds the price effect, so it compares against holding dollars.

**Collected / uncollected fees.** Collected fees have already been withdrawn from the pool. Uncollected fees are what the position could claim right now.

**ROI.** P&L divided by what was deposited.

## Risk and volatility

**Volatility (σ).** How much a price moves, as a yearly standard deviation. 30% means a typical yearly move of about 30%.

**Realised volatility (RV).** Volatility measured from past price moves.

**Implied volatility (IV).** The volatility option prices imply. **Bid IV** uses the price an option seller actually receives.

**LVR (loss-versus-rebalancing).** The steady loss LPs take because arbitrageurs trade against pool prices that lag the market. It is the main cost fees have to cover, and it grows with volatility and with narrower ranges.

**Break-even volatility (σ\*).** The volatility at which a range's fees exactly cover its LVR and re-centring costs. Also called fee-implied vol. If the real volatility is lower than σ\*, the fees win.

**Vol ratio.** Fee-implied volatility divided by the bid IV of the option that carries the same risk. Above 1, the pool pays more for the risk than the options market does. See [Vol ratio](../vol-ratio/README.md).

**Gamma.** How fast a position's exposure to the price changes as the price moves. A range kept on the price and a short at-the-money option both have negative gamma, which is why they can be compared.

## Tokens and flow

**Tokenised equity.** A token backed one-for-one by a real stock or ETF held by the issuer, such as xStocks (for example NVDAx) or Backpack Securities tokens.

**Issuer.** The company that holds the underlying shares and mints the token.

**Underlying.** The listed stock, ETF or commodity fund a token tracks.

**Meme token (meme).** On rangebound, a token launched on a launchpad and paired against a tokenised stock rather than SOL or USDC. See [Memes](../memes/README.md).

**Graduation.** The moment a launchpad token leaves its bonding curve and gets a regular AMM pool.

**Honeypot.** A token holders may be unable to sell, or can sell only at a heavy cost.

**Lookalike mint.** A token using the same name as a tracked asset but not issued by its real issuer. rangebound excludes these.

**Markout.** How the price moved after a trade, from the LP's side. A negative markout means the trader knew something and the LP lost.

**Informed / uninformed flow.** Informed traders (usually arbitrageurs) trade because the pool price is stale, and LPs lose to them. Uninformed traders (retail, memes, routing) trade for their own reasons, and their fees are mostly profit for LPs.