What Is the Mark Price?
The mark price is designed to enhance market stability and reduce forced liquidations during abnormal volatility. It is also used to calculate the unrealized profit and loss (PnL) of positions.
How Is the Mark Price Calculated?
The mark price is determined by multiple market factors. The final mark price is the median of Price 1, Price 2, and the latest traded price.
Mark Price = Median(Price 1, Price 2, Latest Traded Price)
- Price 1 = Index Price × (1 + Funding Rate Basis Rate)
- Funding Rate Basis Rate = Funding Rate × (Time to Next Funding Settlement / Funding Interval)
The funding rate basis rate is determined by the funding rate at the time of calculation and the remaining time until the next funding settlement. For details on funding rates and funding fees, see: Funding Rate and Funding Fee Calculation Guide
- Price 2 = Spot Index + Moving Average Basis
- Moving Average Basis = SUM(Sampled Basis) / Number of Samples
- Basis = (Best Bid + Best Ask) / 2 - Index Price
Sampled basis typically refers to the set of basis values calculated every second over the past 5 minutes. When the basis level expands rapidly, the platform will flexibly adjust the sampling time window based on market volatility, which can be shortened to as little as 1 minute. This helps keep the mark price fair while preventing malicious manipulation.
When the underlying components of the spot index become unreliable and can no longer serve as a meaningful reference for the contract price, the platform will use on-exchange contract quotes as the primary reference for mark price calculation.
To further prevent malicious market manipulation, the platform may activate the Mark Price Spike Protection mechanism for certain markets. When the latest mark price deviates significantly from the average of the past few minutes, the mark price will pause updates and remain at the previous mark price. Once the mark price calculated normally using the method above returns to the level before the deviation, the platform will immediately resume normal mark price updates. Alternatively, if the normally calculated mark price does not revert after a certain period, the mark price will smoothly transition back to normal calculation.
Applications of the Mark Price
Calculation of Unrealized PnL
Unrealized PnL for long positions = Number of Contracts × Contract Multiplier × (Mark Price - Entry Price)
Unrealized PnL for short positions = Number of Contracts × Contract Multiplier × (Entry Price - Mark Price)
Calculation of Position Value
USDT-margined perpetual contract position value = Number of Contracts × Contract Multiplier × Mark Price
BTC-margined perpetual contract position value = Number of Contracts × Contract Multiplier / Mark Price
Calculation of Margin
For margin calculations, please refer to the following two documents: Initial Margin Calculation and Maintenance Margin Calculation.
Mark Price Spike Protection Mechanism
To filter out abnormal extreme price fluctuations and protect customer positions from liquidation, the platform has enabled Mark Price Spike Protection for most contract instruments. When the mark price experiences significant fluctuations relative to the past few minutes, the mark price will stop updating. If the price naturally reverts, the mark price will resume normal calculation and updates. If the price does not revert for an extended period, the mark price will gradually and smoothly return to normal calculation.
During the period when the mark price is paused, order placement continues as normal. Since the mark price is paused, unrealized PnL will also remain temporarily unchanged (to prevent positions from being liquidated). The mark price candlestick chart will continue to display the paused price as usual.
Risk Disclaimer
Contract trading involves significant risk, especially during periods of extreme price volatility, when the mark price may deviate considerably from the latest market traded price. Since unrealized PnL is calculated based on the mark price, the displayed unrealized PnL may differ from the actual PnL settled upon position closing. The mark price is for reference only; final PnL is determined by the actual execution price.
During trading, users should closely monitor the mark price, latest price, and index price to avoid forced liquidation caused by market fluctuations.
Gate reserves the final right of interpretation for this product.
For further assistance, please visit the official Gate support page or contact our customer service team.
Disclaimer
The content provided herein is for reference and educational purposes only and does not constitute any financial, investment, trading, or legal advice, nor does it constitute an offer or solicitation to buy or sell any digital assets. Gate makes no express or implied representations or warranties regarding the accuracy, completeness, or timeliness of the information contained herein. Product features, interfaces, rules, and fee structures may be updated or adjusted at any time. Please refer to the latest announcements and the actual information displayed on the Gate platform for the most accurate details.
Digital asset investments involve significant risk, and prices may fluctuate substantially. You may lose the entire amount of your investment. Please make decisions cautiously based on your own financial situation and risk tolerance after fully understanding the associated risks. If necessary, you are advised to consult an independent professional financial or legal advisor.
For more information about potential risks, please refer to Gate's Risk Disclosure and User Agreement.
