Definition
Mark price is a venue-calculated reference intended to represent the fair value of a futures or perpetual futures contract for margin, unrealized profit and loss, and liquidation calculations.
How a mark price is calculated
The formula varies by venue. It commonly combines an external price index with information from the contract's order book, funding basis or a smoothed premium.
Hyperliquid calculates its mark price from several inputs, including its oracle price, its own book state and perpetual futures prices from external exchanges. Other venues use different combinations and safeguards.
Why venues use it
The latest trade can be temporarily distorted by a small order, thin liquidity or a sudden price spike. A more robust reference makes it harder for one abnormal trade to trigger liquidations or produce a misleading unrealized profit or loss.
The mark price can differ from currently executable prices, especially during rapid market movement.
What it does not mean
Last price is the most recent trade. Index price represents the underlying market using external sources. Mark price is the venue's calculated reference derived from an index and other market inputs.
Where this term fits
Questions about mark price
- Can I execute an order at the mark price?
- Not necessarily. Orders execute against available bids and asks. Mark price is primarily a risk and accounting reference.
- Why is mark price different from last price?
- It uses a calculation designed to reduce the effect of short-lived trades, manipulation and temporary order-book distortions.
- Can mark price trigger liquidation?
- Yes. Hyperliquid and other derivatives venues use mark price in their liquidation calculations.
See these concepts in context
Review the Fensory MCP connection, tools and account controls.