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Mark price is the price the exchange uses to calculate unrealized profit and loss and decide when to liquidate a position. It is not the price shown on the chart.
Crypto futures contracts display two numbers at all times: the last traded price, which draws the candlestick chart, and mark price, which the exchange uses as the liquidation trigger. At low leverage, the gap between them rarely changes the outcome. At 20x and above, it can close a position without any candle printing at that level.
Mark price is not the chart price. It is the exchange’s P&L reference and liquidation trigger. During volatile sessions, mark price can diverge significantly from last price. At high leverage, that gap can erase the entire margin of safety without a candle reaching the liquidation level.
Mark price is a calculated number, not a traded one. No one buys or sells at mark price directly. The exchange derives it from spot prices across major exchanges, typically Coinbase, Kraken, OKX, Bybit spot, and Bitfinex, and applies a smoothing layer to filter short-term noise from the futures book.
Two things run off mark price and only mark price: unrealized profit and loss, and the liquidation price trigger. Everything else uses last price: order fills, the candlestick chart, and realized P&L.
Mark price appears in the positions panel on most exchanges, labeled separately from the chart price and updated continuously. The liquidation level shown alongside it is calculated using mark price as the trigger, not the number on the candlestick.
Before mark price was standard, perpetual futures exchanges triggered liquidations based on last price: the most recent trade on the futures contract itself. A single large market order on a thin futures book could push the contract price far below the broader spot market, triggering mass liquidations on positions that had no reason to close.
BitMEX built its Fair Price Marking system specifically “to avoid unnecessary liquidations” when “the market is being manipulated, is illiquid, or the Mark Price swings unnecessarily.” The solution was to break the link between the futures book’s own last price and the liquidation engine.
Mark price anchors to spot prices across multiple exchanges instead. A wick on one futures order book cannot move it alone. The broader spot market has to move first.
The chart shows last price: the most recent trade on the exchange’s futures order book. Mark price is derived from spot markets across multiple exchanges and filtered for noise. The two update from different sources and do not stay in sync.
In live markets, the gap between mark price and last price can reach several percentage points. A trader watching the chart sees one number. The exchange is calculating their unrealized P&L and liquidation trigger against a different number entirely.
A trader’s long can reach its liquidation level on mark price while the futures chart still shows a price above entry. The chart never prints at the liquidation level. The position closes anyway, because mark price is what the exchange tracks for every open position.
What most traders think: Mark price is the same as the price shown on the chart.
What actually happens: Mark price is calculated from spot prices across multiple exchanges and smoothed against short-term noise. The chart shows last traded price on that exchange’s futures book, a different number.
At low leverage, a gap between mark price and last price is background noise. The margin of safety is large enough to absorb it. At high leverage, the same gap can reach or exceed the entire margin of safety without a single candle printing at that level.
The maintenance margin level determines how close a position sits to forced closure. The table below shows what a 4.9% divergence between mark price and last price means at each leverage level.
What a 4.9% gap between mark price and last price means at different leverage levels:
| Leverage | Margin of Safety | Would a 4.9% gap liquidate? |
|---|---|---|
| 5x | ~19.5% | No |
| 10x | ~9.5% | No |
| 20x | ~4.5% | Yes, barely |
| 50x | ~1.5% | Yes, easily |
Margin of safety figures are approximate and simplified. Actual values depend on maintenance margin rate, exchange, and position size. For precise calculations, see how the liquidation price is calculated on crypto futures exchanges. To find the liquidation price for a specific position, use the liquidation price calculator.
The chart and the mark price can be the same during calm markets. The gap grows during fast moves, when futures order books become thinner than the underlying spot market.
At 20x leverage, the margin of safety is approximately 4.5%. A divergence of 4.9% between mark price and last price is enough to trigger liquidation without the chart ever reaching the liquidation level.
Three things can push mark price away from the chart price: funding rates, basis drift, and the exchange’s smoothing window. Of the three, funding rates have the biggest visible effect on open positions.
When funding runs deeply negative, mark price gets pulled down even if the chart holds steady. A long position that looked safe at open can drift closer to its liquidation level over several days of high negative funding. The chart does not have to move against you.
Basis drift is slower. The basis is the gap between the futures contract price and the spot price. When the futures contract trades persistently above spot, mark price gradually moves higher. When it trades below spot, mark price drifts lower.
The smoothing window is the least visible of the three. Exchanges apply a short moving average to filter out brief spikes. A wick that lasts seconds is ignored. A premium or discount that holds longer than the window will move mark price in the same direction.
Mark Price = Median(Price 1, Price 2, Contract Price)
The formula takes the median of all three inputs, not an average. No single extreme value can push mark price to a liquidation threshold on its own. A wick in Contract Price, a funding spike in Price 1, or a stale basis in Price 2 cannot act alone. The median always falls between the two closest values.
How the formula varies by exchange is covered separately in the mark price vs index price vs last price comparison.
Most exchanges let stop-loss and take-profit orders trigger on either last price or mark price. A last-price stop near the liquidation level carries gap risk: mark price can reach the threshold before the stop fires, closing the position without the chart printing there. Mark-price stops are not triggered by wicks the broader spot market never validated.
Mark price draws from spot prices across multiple major exchanges. No single futures order can move it to a liquidation threshold, which is exactly why it was invented. Wick-based manipulation that triggered mass liquidations before mark price existed no longer works the same way.
Liquidation fires on mark price, not last price. If mark price drifted to the liquidation threshold due to funding pressure, basis drift, or a futures/spot divergence, the position would close at that level even if the chart never printed there. The mark price mechanism was working as designed.
Index price is the weighted average of spot prices across multiple exchanges. Mark price uses the index as one of its inputs but adds a funding-rate adjustment and a smoothed basis component. During high-funding periods, the two can diverge noticeably.
The chart shows where the last trade happened. The exchange watches mark price: a derived, smoothed, cross-platform price that decides when a position can no longer stay open. At low leverage, the gap between them is noise. At 20x and above, it is part of the risk calculation before any trade is placed.
Mark-price liquidations can close a position at a level that never appears on the candlestick. The chart and the liquidation trigger are two different numbers. Understanding which one the exchange is watching changes how a high-leverage position is managed from the moment it opens.
This article is published under Leverage.Trading’s leverage trading & crypto derivatives education , an independent risk-first learning system built to help traders quantify and manage risk before trading.
