🔖Mark Price

What is Mark Price?

To enhance the stability of the futures market and reduce unnecessary liquidations during extreme market fluctuations, we use the Mark Price to calculate users' unrealized profits and losses as well as to trigger forced liquidations.

Mark Price Algorithm

The mark price is calculated using the following formula:

Mark Price = Median(Latest Price, Fair Price, Moving Average Price)

Where:

• Latest Price: The mid-price on the exchange, calculated as the median of the best bid price (#1 Buy on the orderbook), best ask price (#1 Sell on the orderbook), and the last transaction price.

• Fair Price: The index price adjusted by the previous Funding Rate, calculated as follows: Fair Price = Index Price × (1+Previous Funding Rate × (Time Until Next Funding / Funding Interval))

• Moving Average Price: The index price plus the 60-minute moving average of the price difference: Price Difference = Mid Price − Index Price

The mark price takes into account both the spot index price and the moving average of the basis. The moving average mechanism smooths out short-term price fluctuations in the futures contracts, reducing unnecessary forced liquidations caused by extreme price movements.

Index Price

The index price is calculated through a weighted average of the latest transaction prices and the mid-prices (the median of the best bid and ask prices) from major exchanges for the underlying currency pair. It represents the fair market price for that currency pair.