What is a mark price?

A mark price is a reference calculated under a platform’s rules for position valuation and risk assessment. Crypto contract pages often show it alongside the last traded price: the latter records the latest transaction, while the mark price provides a basis for calculating unrealized profit and loss and checking margin sufficiency. This article uses contract trading as its example.

Why not simply use the last traded price?

The last traded price represents only the latest transaction. When executable quantity is limited in a contract market, a small trade can push the price away from other markets before it quickly reverses. If position risk followed that trade entirely, a temporary deviation could affect many positions.

The mark price incorporates information such as the index price to reduce the influence of brief anomalies in a single contract market. The index usually combines several spot markets to provide an underlying asset reference; the mark then incorporates contract market conditions under the product’s rules.

This does not fix the price. When spot markets move overall, the mark price changes too; problems with data sources or calculation can also affect it.

How is the mark price calculated?

One approach adds a smoothed contract price difference to the spot index. The spot index reflects the asset’s spot reference, while the difference indicates whether the contract is above or below it.

For example, OKX’s documented contract calculation first averages the highest contract bid and lowest ask to obtain the bid-ask midpoint, then subtracts the index. This difference is called the basis in that formula. The system takes its moving average over a period: new observations enter as old ones leave, reducing the impact of a single jump.

Mark price = index price + moving average of the basis

If the current index is 100 USDT and the basis moving average calculated this way is 0.2 USDT, the mark is 100.2 USDT. USDT is the quote asset, and these figures are illustrative; 0.2 is a calculation over time, not the difference between one current trade and the index.

A persistent contract deviation from spot gradually enters the average, whereas a brief jump usually has less influence. This is a particular calculation example, not a universal formula for every platform or product.

How is the mark used for unrealized profit and loss?

Unrealized profit and loss is an estimate based on a reference price before a position is closed. Using the mark means valuing the position at that price rather than the latest trade.

For example, a hypothetical linear long holding 10 units gains 10 USDT of price profit for each 1 USDT rise. With an entry price of 100 and a mark of 102, mark-based unrealized profit is 10 × (102 − 100) = 20 USDT. If the last traded price is 103, using that price gives 30 USDT. The references differ; both examples exclude fees.

Product interfaces may offer different profit-and-loss displays. The risk-assessment price need not match the reference a user selects for viewing unrealized results; final results after closing depend on executions and fees.

How does the mark relate to liquidation?

Platforms need to check whether a position still has sufficient collateral. Margin is collateral for trading; equity including unrealized results is compared with maintenance margin and applicable fee requirements to determine whether positions must be reduced or closed.

For example, OKX’s contract rules use the mark for this risk assessment. The last traded price touching a displayed estimated liquidation price does not mean the mark used in the risk calculation has reached it. Conversely, even without that last-price touch, the mark and account equity may already satisfy liquidation conditions.

The estimated liquidation price is derived from current position and account conditions, whereas the mark is a continuously updated valuation price. See liquidation for the handling process.

Does a closing trade execute at the mark price?

Mark-based valuation does not guarantee execution at that price. Once an order enters the market, its actual price depends on compatible quotes and quantities; even the last traded price records only a previous trade and does not guarantee the next one.

The mark therefore answers “at what price is the position valued,” while execution price answers “at what price did this trade actually occur.” They differ, and execution can also involve slippage.

Related terms

Explore index prices, estimated liquidation prices and margin, or return to the crypto glossary.

References

• OKX: Mark price and last price
• OKX: Liquidation FAQ