What Is the ‘Mark Price’ and Why Is It Used Instead of the ‘Last Traded Price’ for Liquidation?

The Mark Price is an estimated fair value of a futures contract, calculated using a weighted average of the spot price and the basis of the futures contract. It is used for calculating unrealized profit/loss and triggering liquidations.

The Last Traded Price is susceptible to manipulation or temporary illiquidity spikes. Using the Mark Price prevents unfair liquidations caused by short-term market anomalies or malicious trading activity.