Mark Price
The mark price is a fair-value reference price that derivatives platforms use to calculate unrealized profit and loss and to decide liquidations. It is built from multiple sources, so a brief spike on a single exchange is less likely to liquidate traders unfairly.
Last price versus mark price
The last price is simply the price of the most recent trade on a platform's own order book. It can jump sharply for a moment if a large order hits a thin book or if someone tries to manipulate it. If liquidations were based on the last price, a single burst of selling could close many positions, which might then cascade.
The mark price smooths this out. It typically starts from an index price, an average of spot prices from several major exchanges, and adds a smoothed version of the perpetual's premium or discount to that index. Exact formulas differ by platform and are published in their documentation.
What it is used for
Platforms use the mark price to value open positions, so the unrealized profit and loss you see is usually based on it. Most importantly, the liquidation engine compares your margin against the mark price. Your liquidation price is therefore a mark-price level, not a last-price level.
An example
Say your long position on a BTC perpetual has a liquidation price of 45,000 dollars. A large market sell order briefly drives the last traded price on that exchange to 44,800, while other major exchanges stay around 46,000. Because the mark price follows the index, it stays above 45,000 and your position survives. The reverse also happens: if the broad market falls, you can be liquidated even when the last price on your exchange lags behind.
Limits to keep in mind
A mark price protects against local anomalies, not against real market moves. In a fast crash across all exchanges, the index and mark price fall too. If a coin trades on only a few venues, the index itself can be manipulated, which has been used in some attacks on smaller markets. Always know whether a platform's stop orders trigger on mark price or last price, since the two can behave differently.
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Frequently asked questions
Why is my liquidation price not where the chart touched?
Liquidation uses the mark price, while charts usually show last traded prices. A wick on one exchange may not move the mark price enough.
Is the mark price the same as the index price?
Not quite. The index is an average of spot prices; the mark price usually adds a smoothed basis or premium on top of it.
Can I see the mark price?
Yes. Most derivatives platforms show both the last price and the mark price on the trading screen and publish how the mark price is calculated.
Related terms
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