Pricing and execution
Mark price
Understand why perpetual venues calculate a mark price and how it can differ from the last traded price and index price.
Also called: fair price, futures mark
Definition
Mark price — The mark price is a venue-calculated fair-price estimate used for functions such as unrealized PnL, margin checks, and liquidation. It is designed to be harder to distort than a single last trade. Its formula commonly references an index price and market premium, but the exact inputs, bounds, and update rules vary.
In plain English
The last trade shows where one transaction happened. It may be stale, unusually small, or briefly far from the broader market. The mark price gives the risk system a more stable value for calculating the position’s condition.
The mark is not necessarily a price at which the trader can execute. Closing still depends on the venue’s available liquidity and order or pricing model.
How it works
A common design starts with an index price assembled from external spot markets, then applies a bounded premium or basis derived from the perpetual market. Some designs add smoothing, impact-price inputs, or other protections.
The venue then uses the mark to calculate unrealized PnL and compare account equity with maintenance requirements. Because formulas differ, “mark price” should be read as a defined venue value, not a universal calculation.
Why it matters
Liquidation risk can change even when the last-traded price shown on a chart does not. A trader checking only the chart may misunderstand why unrealized PnL or the liquidation estimate moved. The mark, index, and executable price answer different questions.
Worked example
Suppose the index price is $60,000. A small last trade occurs at $60,900, but the venue’s bounded premium calculation produces a mark price of $60,100.
The risk engine may value a 0.20 BTC long at $60,100 for unrealized PnL and margin, not at the $60,900 last trade. Closing the position could still produce another price entirely.
How it works on Lynx
Lynx documentation does not define a separate mark-price series like some order-book venues. It describes an oracle entry price and an oracle reference price for open-position PnL, with the oracle price also used when a trade closes.
For Lynx, do not assume a chart’s latest trade is the risk-accounting price. The oracle reference, entry price, artificial opening spread, and final close price answer different questions.
Common misconception
Mark price, index price, and execution price are not synonyms. The mark serves risk accounting; the index represents a reference market; execution determines the actual trade result.
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Related definitions and practical guides.
Sources and review
Written by Lynx Editorial. Reviewed by Lynx Protocol Team on July 31, 2026. Review policy.