Index, mark and last price
The index price averages spot prices across major exchanges. The mark price is a fair price derived from it and is used for unrealised PnL and liquidation. The last price is the latest trade and is more volatile.
The three prices
| Price | What it is | Used for |
|---|---|---|
| Index price | A volume-weighted average of spot prices on several major exchanges | A fair benchmark, funding rates and the base of the mark price |
| Mark price | Derived from the index price and a moving-average basis | Unrealised PnL and liquidation |
| Last price | The price of the most recent trade on the contract | Realised PnL and short-term trading |
On HedgerX
For BTCUSDT, HedgerX builds its index from Binance, Bybit and OKX, weighted at about 43%, 36% and 21%. On the futures page you can choose to show the mark price above the chart.
Why it matters
A mark price protects against liquidations that thin liquidity or price manipulation on a single venue would cause on a last-price basis. The flip side is that your liquidation can happen at a price you never saw on the last-price chart. See forced liquidation.
Frequently asked questions
Why does the contract price differ from spot?
Different traders and activity drive the contract. The gap can widen as the contract market grows, which is why exchanges rely on a mark price for risk.
Which price liquidates me?
The mark price. A position is liquidated when the mark price reaches the liquidation price.