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How Does a Large Deviation between Mark Price and Last Traded Price Trigger a Warning?

A large deviation signals potential manipulation or illiquidity, triggering a warning to prevent liquidations based on a skewed spot price.
Greeks.Live20.11.25

How Does a Large Deviation between Mark Price and Last Traded Price Trigger a Warning?

A large deviation between the mark price (fair value, derived from the oracle) and the last traded price (exchange spot price) suggests a potential market anomaly, illiquidity, or manipulation on that specific exchange. This deviation triggers a warning or a 'circuit breaker' to alert traders and prevent liquidations based on the potentially manipulated spot price.

The mark price is used as the safe reference point.

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