# How Does the "Mark Price" Calculation Affect Liquidation Triggers? ⎊ Path

**Published:** 2025-12-05
**Author:** Greeks.live
**Categories:** Path

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## How Does the “Mark Price” Calculation Affect Liquidation Triggers?

The mark price is an estimate of the true value of a futures or perpetual contract, typically derived from the spot price and the funding basis, rather than the last traded price. Exchanges use the mark price, not the last price, to calculate the unrealized P&L and trigger liquidations.

This prevents market manipulation ("wicks") from unfairly triggering liquidations, but a sustained divergence still triggers them.

- [How Does a Derivatives Exchange Use Multiple Oracles to Prevent Unfair Liquidation?](https://learn.greeks.live/path/how-does-a-derivatives-exchange-use-multiple-oracles-to-prevent-unfair-liquidation/)

- [Define the Term “Mark Price” and Its Significance in Preventing Unfair Liquidations](https://learn.greeks.live/path/define-the-term-mark-price-and-its-significance-in-preventing-unfair-liquidations/)

- [Why Do Exchanges Use a Mark Price Instead of the Last Traded Price for Liquidation?](https://learn.greeks.live/path/why-do-exchanges-use-a-mark-price-instead-of-the-last-traded-price-for-liquidation/)

- [What Is the ‘Mark Price’ and Why Is It Used Instead of the ‘Last Traded Price’ for Liquidation?](https://learn.greeks.live/path/what-is-the-mark-price-and-why-is-it-used-instead-of-the-last-traded-price-for-liquidation/)

- [What Are the Risks of Using a ‘Mark Price’ versus a ‘Last Price’ for Liquidation Triggers?](https://learn.greeks.live/path/what-are-the-risks-of-using-a-mark-price-versus-a-last-price-for-liquidation-triggers/)

- [What Is the Difference between Mark Price and Last Traded Price?](https://learn.greeks.live/path/what-is-the-difference-between-mark-price-and-last-traded-price/)

- [What Is ‘Mark Price’ and How Do Oracles Contribute to Its Calculation?](https://learn.greeks.live/path/what-is-mark-price-and-how-do-oracles-contribute-to-its-calculation/)

- [What Is the Difference between Mark Price and Last Price in the Context of Liquidation?](https://learn.greeks.live/path/what-is-the-difference-between-mark-price-and-last-price-in-the-context-of-liquidation/)

## Glossar

### [Last Traded Price](https://learn.greeks.live/area/last-traded-price/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)

Definition ⎊ Last traded price refers to the most recent price at which a financial instrument, such as a cryptocurrency, option, or future, was bought or sold on an exchange.

### [Mark Price](https://learn.greeks.live/area/mark-price/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)

Valuation ⎊ The Mark Price within cryptocurrency derivatives represents a fair value estimation, calculated to mitigate price manipulation and ensure orderly market functioning, particularly during periods of low liquidity or volatility.

## Discover More

### [How Does a 'Mark Price' Calculation Differ from the 'Index Price' Calculation?](https://learn.greeks.live/path/how-does-a-mark-price-calculation-differ-from-the-index-price-calculation/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![How Does a 'Mark Price' Calculation Differ from the 'Index Price' Calculation?](https://learn.greeks.live/wp-content/uploads/2025/10/Dynamic-Tension-Equilibrium-of-Green-and-Black-Tokens-Simulating-Options-Contract-Settlement-Under-Liquidity-Stress.webp)

The index price is the spot average; the mark price is a blended rate of the index and a time-weighted futures price, used for stable liquidation and P&L calculation.

### [How Does the Risk-Free Rate Input Affect the Black-Scholes Calculation?](https://learn.greeks.live/path/how-does-the-risk-free-rate-input-affect-the-black-scholes-calculation/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![How Does the Risk-Free Rate Input Affect the Black-Scholes Calculation?](https://learn.greeks.live/wp-content/uploads/2025/10/Precision-Engineering-of-Decentralized-Finance-Option-Pricing-Oracles-Utilizing-Trackball-Input-Mechanics.webp)

A higher risk-free rate increases call option value and decreases put option value by affecting the present value of the strike price.

### [How Does a Circuit Breaker Mechanism Affect the Funding Rate Calculation?](https://learn.greeks.live/path/how-does-a-circuit-breaker-mechanism-affect-the-funding-rate-calculation/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![How Does a Circuit Breaker Mechanism Affect the Funding Rate Calculation?](https://learn.greeks.live/wp-content/uploads/2025/10/Precision-Machined-Actuator-Mechanism-Indicating-Decentralized-Exchange-Limit-Order-Book-Mechanics.webp)

It can cap the maximum funding rate during extreme volatility, but doesn't change the underlying formula. Plain text no other syntax allowed.

### [What Is a 'Margin Call' and What Triggers It in a Volatile Crypto Market?](https://learn.greeks.live/path/what-is-a-margin-call-and-what-triggers-it-in-a-volatile-crypto-market/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![What Is a 'Margin Call' and What Triggers It in a Volatile Crypto Market?](https://learn.greeks.live/wp-content/uploads/2025/10/Quantum-Roller-Bearing-Analogy-for-Volatility-Surface-Contango-in-Decentralized-Exchange-Futures.webp)

A margin call is a demand for additional funds, triggered by a rapid adverse price movement in a volatile market that reduces account equity below the maintenance margin.

### [What Is the Term for the Price Movement That Triggers a Margin Call?](https://learn.greeks.live/path/what-is-the-term-for-the-price-movement-that-triggers-a-margin-call/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![What Is the Term for the Price Movement That Triggers a Margin Call?](https://learn.greeks.live/wp-content/uploads/2025/10/Macro-Cosmovision-of-a-Cyan-Hydrophilic-Arbiter-Balancing-Speculative-Hedging-Mechanisms.webp)

Adverse price movement of the futures contract that causes the margin account equity to fall below the maintenance margin level.

### [How Does High Short-Term Implied Volatility Affect the Calculation of Option Greeks?](https://learn.greeks.live/path/how-does-high-short-term-implied-volatility-affect-the-calculation-of-option-greeks/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![How Does High Short-Term Implied Volatility Affect the Calculation of Option Greeks?](https://learn.greeks.live/wp-content/uploads/2025/10/Geometric-Equilibrium-Visualization-of-Implied-Volatility-Surface-Contraction-in-Decentralized-Finance-Structures.webp)

It increases Gamma significantly, necessitating more frequent delta hedging, and makes ATM Delta closer to 0.50.

### [If a Buyer Exercises an Option, How Does That Affect Their Maximum Loss Calculation?](https://learn.greeks.live/path/if-a-buyer-exercises-an-option-how-does-that-affect-their-maximum-loss-calculation/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![If a Buyer Exercises an Option, How Does That Affect Their Maximum Loss Calculation?](https://learn.greeks.live/wp-content/uploads/2025/10/Visualizing-Stochastic-Volatility-Surface-Intersections-Amidst-Decentralized-Finance-Instrument-Pricing.webp)

Exercising does not change the maximum loss (premium), but it does increase the total capital outlay for the transaction.

### [How Is the Mark Price Calculation Different for Perpetual Futures versus Traditional Futures?](https://learn.greeks.live/path/how-is-the-mark-price-calculation-different-for-perpetual-futures-versus-traditional-futures/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![How Is the Mark Price Calculation Different for Perpetual Futures versus Traditional Futures?](https://learn.greeks.live/wp-content/uploads/2025/10/Asymmetric-Volatility-Surface-Contraction-Sculpting-Cryptographic-Digital-Asset-Hedging-Mechanisms.webp)

Perpetual futures Mark Price includes a funding rate component; traditional futures use a simpler calculation tied to expiration.

### [Does the Liquidation Fee Factor into the Calculation of the Bankruptcy Price?](https://learn.greeks.live/path/does-the-liquidation-fee-factor-into-the-calculation-of-the-bankruptcy-price/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![Does the Liquidation Fee Factor into the Calculation of the Bankruptcy Price?](https://learn.greeks.live/wp-content/uploads/2025/10/Layered-Material-Abstraction-Modeling-Volatility-Skew-in-Cryptocurrency-Hedging-Instruments.webp)

Yes, the fee is deducted from collateral, which slightly moves the bankruptcy price closer to the entry price.

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**Original URL:** https://learn.greeks.live/learn/how-does-the-mark-price-calculation-affect-liquidation-triggers/
