What is Mark Price?
As the most important parameter when calculating unrealized P/L - the primary driver of liquidations - an accurate mark price is pivotal in avoiding unnecessary liquidations. And at CoinW, an "Index Price" including prices from various major crypto exchanges is the primary component of our Mark Price.
CoinW's USDT-Margined Futures Price Index is based on prices from a basket of major spot trading markets, including Binance, HTX, OKX, Bybit, Gate.io, and Kucoin.
We also undertake additional protections to avoid poor market performance during Spot exchange outages or connectivity issues:
If more than 1 exchange shows a price deviation greater than 5%, we will replace our Price Index with the median price of all sources.
If an exchange has not updated its trading data in the last 10 seconds, its weight in the weighted average price calculation will be set to zero.
The Index Price can be regarded as the fair spot price for the underlying and will be used for all Unrealized P/L calculations. Note that Realized P/L will still be based on the actual prices your order gets filled.
Mark Price is calculated as follows:
Mark Price = Median* (Price 1, Price 2, Contract Price)
Price 1 = Index Price * (1 + Last Funding Rate * (Hours Until Funding / 8))
Price 2 = Index Price + Moving Average (30-minute)*
*Moving Average (30-minute Basis) = Moving Average ((Bid1+Ask1)/2- Price Index), which measures every minute for 30 minutes.
Please note that due to extreme market conditions or deviations in price sources, Mark Price may deviate from the spot price. At such times, CoinW will take additional protective measures to anchor Mark Price at Price 2.
Mark Price is a better estimate of the fair value of the underlying compared to its Last Price. This price will better prevent unnecessary liquidations for traders and to discourage any market manipulations by poor actors.
Example of an Index Price:
BTCUSD Index = Σ [(BTCUSD of Bitstamp) x Weight 1) + (BTC-USD of Coinbase Pro x Weight 2) + (XBT/USD of Kraken x Weight 3) + (USD-BTC of Bittrex x Weight 4) + ( BTCBUSD of Binance x Weight 5)] / Total Weight
What is Mark Price?
As the most important parameter when calculating unrealized P/L - the primary driver of liquidations - an accurate mark price is pivotal in avoiding unnecessary liquidations. And at CoinW, an "Index Price" including prices from various major crypto exchanges is the primary component of our Mark Price.
CoinW's USDT-Margined Futures Price Index is based on prices from a basket of major spot trading markets, including Binance, HTX, OKX, Bybit, Gate.io, and Kucoin.
We also undertake additional protections to avoid poor market performance during Spot exchange outages or connectivity issues:
If more than 1 exchange shows a price deviation greater than 5%, we will replace our Price Index with the median price of all sources.
If an exchange has not updated its trading data in the last 10 seconds, its weight in the weighted average price calculation will be set to zero.
The Index Price can be regarded as the fair spot price for the underlying and will be used for all Unrealized P/L calculations. Note that Realized P/L will still be based on the actual prices your order gets filled.
Mark Price is calculated as follows:
Mark Price = Median* (Price 1, Price 2, Contract Price)
Price 1 = Index Price * (1 + Last Funding Rate * (Hours Until Funding / 8))
Price 2 = Index Price + Moving Average (30-minute)*
*Moving Average (30-minute Basis) = Moving Average ((Bid1+Ask1)/2- Price Index), which measures every minute for 30 minutes.
Please note that due to extreme market conditions or deviations in price sources, Mark Price may deviate from the spot price. At such times, CoinW will take additional protective measures to anchor Mark Price at Price 2.
Mark Price is a better estimate of the fair value of the underlying compared to its Last Price. This price will better prevent unnecessary liquidations for traders and to discourage any market manipulations by poor actors.
Example of an Index Price:
BTCUSD Index = Σ [(BTCUSD of Bitstamp) x Weight 1) + (BTC-USD of Coinbase Pro x Weight 2) + (XBT/USD of Kraken x Weight 3) + (USD-BTC of Bittrex x Weight 4) + ( BTCBUSD of Binance x Weight 5)] / Total Weight