What is the difference between the mark price and the futures contract’s last price?
The world of commodities trading is filled with complicated concepts, and understanding the differences between mark price and futures contract’s last price is one of them.
This post will explore the differences between the two, why they’re important, and how traders and investors can use them to make decisions.
So, if you’re looking to understand mark price and futures contract last price, you’ve come to the right place!
What Is Mark Price?
Mark Price is the price used to calculate unrealized PnL, liquidations and margin for a contract and determine when an order should trigger.
It differs from Spot Price because it considers the price manipulation of the underlying asset’s exchange. This helps traders avoid abnormal price fluctuations or margin calls from taking a position based on spot prices.
Mark Price also serves as a reference point for liquidation values, allowing traders to take positions without worrying about triggering liquidations based on the spot price.
By using Mark Price instead of Spot Price, traders can ensure their positions are secure and not susceptible to market volatility or price manipulation. Mark Price is an important tool for traders who want to limit risk and ensure their positions remain safe and profitable.
What Is Last Price?
The last price is the price of the most recent trade within a particular contract. The last price can refer to a variety of different contracts, including futures and Perpetual contracts such as BTC-USD.
This price may be slightly different than the actual spot price of the underlying asset it refers to. It will also be determined by supply and demand from traders wishing to buy and sell that particular contract.
Thus, the last price of a futures contract can deviate from the spot price of an asset and will usually follow the same trends over time. However, it can sometimes deviate from this due to changes in trader sentiment or unexpected news events.
As such, traders need to track both the spot price and the last price of their chosen underlying asset to ensure they are aware of any potential changes in value which could affect their trading decisions.
How to Set Last Price and Mark Price in Take Profit & Stop Loss.
Setting the last price and mark price when taking profit or stopping loss is an important part of trading.
When setting up a take profit or stop loss position, it is important to consider whether you can use the last price or mark price. In some apps, you can type in either one, while others may only let you choose one type.
Depending on your app choice, you can trigger an order using either the last price or the mark price. It is important to understand how to set up these prices correctly to maximize your profits and minimize your losses.
Difference between Last Price vs. Mark Price
Price is a key factor in trading, and understanding the difference between the Last Price and Mark Price can be helpful.
As earlier said, the Last Price is the actual price at which a trade was executed, while the mark price is an indicator of a position’s value. This can be used to follow movements in the market price, as the mark price will often be close to the last price.
Every user of an app or platform like this should take the time to understand how these prices work together to use them effectively.
The mark price provides an indication of where the market is heading, and the last price shows what it has actually done. It’s like having two indicators combined into one – users can get a better sense of their position by using both prices together.
The last price will always be the actual closing price, but combining it with the mark gives you a more accurate picture of real-time performance in the market.
In conclusion, the Mark Price and Futures Contract Last Price can vary in certain market conditions. This is due to the difference in the pricing methodology between the two values. It is important to understand the differences between the two when analyzing the market to make the best investment decisions.