What is Mark Price?
Mark price is the reference price an exchange uses to value open perpetual positions, compute unrealized PnL, and trigger liquidations. It is derived from the underlying index price (a basket of spot markets) plus a funding basis, rather than the last traded price on a single order book, to resist manipulation and wicks.
Mark price exists to answer one question fairly: what is a perpetual position actually worth right now? If exchanges used the last traded price, a single large market order or a thin order book could spike or crater the quote for a fraction of a second, mass-liquidating traders on noise rather than real market moves. To prevent this, the exchange computes a mark price anchored to an index price — an average of spot prices from several major exchanges — and adjusts it with a funding-basis component. The result is a smoothed, manipulation-resistant valuation that tracks the true market but ignores momentary wicks on any one venue.
The mark price is the number that matters for your money. Your unrealized PnL, your margin ratio, and — critically — your liquidation trigger all reference mark price, not last price. This is why a position can show a loss even when the price on the chart (last trades) has barely moved: the chart may plot last price while your PnL is marked to the index-derived mark, and the two diverge whenever the local order book drifts from the broader market. On most exchanges the candlestick chart can be toggled between last price and mark price for exactly this reason.
Mark price is also what drives funding. The funding rate is built from the gap (the basis) between the perpetual's mark price and the underlying index price: when the perp trades persistently above index, the basis is positive and longs pay shorts to pull the mark back toward index; when it trades below, shorts pay longs. So the same mark price that decides your liquidation also decides which side of a funding-arbitrage trade collects the carry.
For funding-rate arbitrageurs this has two direct consequences. First, because entry, exit, and liquidation are all marked to index-derived prices rather than the last print, a delta-neutral book (long one venue, short another) is valued consistently across exchanges — the mark price is what makes the hedge behave as intended. Second, the mark-versus-last gap is a real, if small, cost and risk: you fill at last/execution prices but are immediately marked to the index, so a position can open slightly in the red on paper. A realistic backtest measures the funding you actually collect against the mark, not the last-price illusion.
Worked example: mark vs last divergence
- •You open a 1 BTC long perpetual at a last traded price of $60,050 (a small wick above the market).
- •At that instant the index price (spot basket) is $60,000, and the exchange mark price = index + small basis = $60,010.
- •Your entry fills at last price: $60,050. But your position is immediately valued at mark: $60,010.
- •Unrealized PnL = (mark - entry) x size = (60,010 - 60,050) x 1 = -$40.
- •The chart (last price) has not moved, yet your PnL shows -$40 — because you bought above the mark and are marked to index.
- •Liquidation check: suppose your liquidation price is $54,000. Even if a single venue prints a wick down to $53,900 on thin liquidity, you are NOT liquidated — because mark price (index-derived) stayed at ~$60,000.
- •Only if the mark price itself falls to $54,000 does liquidation trigger. Wicks on last price alone cannot liquidate you.
Index Price vs Mark Price vs Last Price
| Index Price | Mark Price | Last Price | |
|---|---|---|---|
| What it is | Basket of spot prices across major exchanges | Index price adjusted by funding basis | Most recent trade on this exchange's order book |
| Source | Multiple external spot markets | Derived from index (+ basis) | This venue only |
| Manipulation resistance | High | High | Low (single wick/thin book moves it) |
| Drives unrealized PnL | No | Yes | No |
| Drives liquidation | No | Yes | No |
| Drives funding rate | Reference leg | Basis leg (mark - index) | No |
| You fill at | No | No | Yes (execution price) |
| Best for | Fair-value anchor | Valuing & closing positions | Reading live trade flow |
FAQ
What is mark price in crypto futures?
Mark price is the reference price an exchange uses to value your open perpetual position, calculate unrealized PnL, and decide liquidations. It is derived from an index price (a basket of spot prices from several exchanges) plus a funding-basis adjustment, so it resists manipulation and short-lived wicks that can distort the last traded price.
Is mark price always different from last traded price?
No — they are usually very close and often identical on deep, liquid markets. They diverge when the local order book drifts from the broader market: during fast moves, thin liquidity, wicks, or when a perpetual trades at a premium or discount to spot. The gap is normally tiny but can widen sharply in volatile conditions.
Why is my PnL showing a loss when the chart price has not moved?
Because your PnL is calculated from mark price, while the chart usually plots last price. If you entered slightly above the mark (for example, buying into a small wick), you are immediately marked to the index-derived mark and show a small loss even though the last-price chart looks flat. Switching the chart to mark price makes the two agree.
Can I be liquidated if last price never reaches my liquidation price?
Yes. Liquidation is triggered by mark price, not last price, on virtually all major exchanges. If the index-derived mark price falls to your liquidation level you are liquidated — even if the last traded price on that specific venue never printed there. Conversely, a lone wick in last price that mark price ignores will not liquidate you.
Which is better, mark price or last price?
Neither is universally better — they serve different purposes. Mark price is better for valuing positions, managing margin, and judging liquidation risk because it is smoothed and manipulation-resistant. Last price is better for reading live trade flow and knowing the exact price your order will fill at. Traders watch last price for execution and mark price for risk.
See mark price live across 36 exchanges.
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