What Is the Difference between Mark Price and Last Traded Price?
The Last Traded Price is simply the price of the most recent trade on the perpetual swap order book. The Mark Price, however, is a more robust price used for calculating a trader's unrealized profit/loss and for liquidation purposes.
It is often calculated as a time-weighted average of the Last Traded Price and the Index Price. This is done to prevent temporary price spikes from causing unfair liquidations.
Glossar
Last Traded Price
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
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.
Index Price
Derivation ⎊ Index price construction for crypto derivatives requires selecting a representative basket of underlying assets and calculating a weighted average based on established market capitalization or volume metrics.