Explanation of Last Price vs. Mark Price for Perpetual Contracts
In perpetual contract trading, Last Price and Mark Price are two very important but distinct price concepts. Correctly understanding the difference between them will help you better manage position risks and avoid unnecessary forced liquidations.
I. Last Price
Last Price refers to the price of the most recent executed trade for the contract—i.e., the price at which the last successful order match occurred.
Characteristics of Last Price:
Determined by real-time order matching between buyers and sellers.
Reflects immediate supply and demand changes in the contract market.
Can fluctuate rapidly due to short-term sentiment or liquidity shifts.
May occasionally deviate from spot prices or prices on other platforms.
Therefore, Last Price is more indicative of immediate trading conditions and is primarily used for:
Displaying market conditions on the trading interface.
Serving as a reference for market order matching.
Observing short-term market fluctuations.
II. Mark Price
Mark Price is the estimated fair value price of a contract, primarily used for risk control, not for actual trade execution.
NewCoin’s Mark Price is typically calculated by considering:
The spot index prices from multiple major exchanges.
A reasonable price weighting and smoothing mechanism.
Purpose of Mark Price:
Preventing price manipulation.
Reducing unfair liquidations caused by short-term abnormal volatility.
Providing a more stable and reliable benchmark for risk assessment.
Mark Price does not directly participate in order matching but is crucial for contract risk management.
III. Applications of Mark Price
1️⃣ Forced Liquidation (Liquidation) NewCoin’s forced liquidation mechanism is based on Mark Price, not Last Price. When the Mark Price reaches a position’s liquidation price, the system may trigger forced liquidation. This mechanism helps prevent erroneous liquidations due to extreme short-term fluctuations in the Last Price, even if the market has not genuinely moved to a risky level.
2️⃣ Calculation of Unrealized Profit and Loss (PnL) The unrealized PnL of a position is also calculated based on Mark Price, not the Last Price. Benefits of this approach:
Smoother PnL calculations.
No significant jumps due to abnormal short-term trades.
More accurate reflection of a position’s risk status.
IV. Important Note on Stop-Loss Settings
Some users may wonder: “Why was my position liquidated even though I set a stop-loss?”
Common reasons include:
The stop-loss price was set too close to the liquidation price.
The stop-loss was triggered based on Last Price instead of Mark Price.
The Mark Price reached the liquidation price before the Last Price.
Official Recommendation: When your stop-loss price is close to the liquidation price, prioritize selecting “Mark Price” as the trigger condition for stop-loss orders. This ensures your risk control logic aligns with the system’s liquidation mechanism.
V. How to View Historical Mark Price Data?
On Web: Navigate to the contract trading page and click [Contract Data] to view Mark Price-related information.
On App: On the contract trading page, tap [⋯] in the upper-right corner and select [Historical Mark Price] to view the data.
VI. Comparison Summary: Last Price vs. Mark Price
Aspect
Last Price
Mark Price
Definition
Price of the latest trade
Estimated fair value price
Used for Order Matching?
✔ Yes
✘ No
Used for Liquidation?
✘ No
✔ Yes
Used for Unrealized PnL?
✘ No
✔ Yes
Volatility
Higher
Lower
Primary Use
Market display, trade reference
Risk control, liquidation judgment
VII. Summary
Last Price reflects the immediate result of market transactions.
Mark Price is a smoothed reference price for risk management.
Forced liquidation and unrealized PnL are both based on Mark Price.
Mark Price is not the actual trading price but a critical mechanism designed to protect traders and reduce risks during extreme market conditions.
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