Trading glossary · practical definition
What is mark price?
A reference price used by derivatives venues for unrealized PnL and liquidation calculations.
Mark price in plain English
A reference price used by derivatives venues for unrealized PnL and liquidation calculations.
It is designed to reduce manipulation from a single thin last trade.
Practical example
A contract can print one last price while liquidation logic follows a smoother index-derived mark.
Common mistake
Watching only last price near liquidation.
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