Why is the mark price important in cryptocurrency trading, and how does it differ from the last price?

3 answers

• ShishankJul 28, 2023 · 2 years ago
  The mark price is an important metric in cryptocurrency trading as it represents the current market value of an asset. Unlike the last price, which is the price at which the most recent trade occurred, the mark price is used to determine the settlement price of futures contracts. It is calculated based on factors such as the spot price, funding rate, and interest rates. By using the mark price, traders can avoid unnecessary liquidations and better manage their risk exposure in volatile markets.
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• Atkinson McConnellFeb 06, 2024 · a year ago
  The mark price is crucial in cryptocurrency trading because it helps maintain fair and accurate pricing. Unlike the last price, which can be easily manipulated by a single large trade, the mark price takes into account the overall market conditions and liquidity. This ensures that traders are not misled by temporary price fluctuations and allows for a more stable trading environment. Additionally, the mark price is used in various trading strategies and risk management tools, making it an essential component for both individual traders and institutional investors.
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• Conley HoldenJul 15, 2021 · 4 years ago
  The mark price is of utmost importance in cryptocurrency trading. It serves as a reference point for determining the value of an asset and is used in various trading instruments such as futures contracts and options. Unlike the last price, which can be influenced by low liquidity or market manipulation, the mark price is calculated based on a weighted average of multiple exchanges. This helps to ensure a fair and accurate representation of the asset's value, allowing traders to make informed decisions and reducing the risk of price manipulation. At BYDFi, we prioritize the use of mark price in our trading platform to provide our users with a transparent and reliable trading experience.
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