Understanding mark price

What is Mark Price?

Mark Price refers to the fair value of the perpetual contract at the current time. Our Mark Price is an exponential moving average of the last traded price with a 20 second half-life. It is updated every second.

Unlike the Market Price, which can be influenced by temporary market fluctuations and is expected to have a higher volatility, the Mark Price mitigates abnormal price fluctuations and reduces the risk of forced liquidations.

Why do we need Mark Price?

Mark Price is a valuable tool as it provides stability and fairness in perpetual trading which helps to mitigate abnormal price fluctuations and reduce the risk of forced liquidations. Mark price also serves as a safeguard against manipulative trading as it more accurately reflects derivative values in highly uncertain markets.

How is the Mark Price used?

  • Liquidation: Mark price is used as reference price for liquidation. When a partial liquidation or full liquidation event takes place, the liquidation engine sends limit orders at relative ratios to the mark price when it seeks to reduce or close all open perpetual positions. Learn more about how liquidation works.

  • Funding: Funding payments in perpetual contracts are used to ensure that the market price of the perpetual futures market is correlated to its underlying price over the medium to long term. For instance, the BTC/USDC PERP perpetuals market should be correlated to the BTC/USDC spot market price. You will receive or pay more or less funding depending on the relative difference between the Mark Price and the Index Price.

  • Risk management: Mark Price provides a stable and reliable reference price to calculate mark-to-market profits and losses, which allows for a more controlled approach to managing positions and prevent unnecessary liquidations.

How is the Mark Price calculated?

Every second we recalculate the value

Mark Price = Index Price * (1 + SPREAD)


SPREAD = EMA((Last Trade Price - Index Price) / Index Price, 30 seconds)

EMA(x, y) = exponential moving average of the input signal x, with a half-life decay of y

Although Mark Price is updated every second SPREAD is only updated while trading is enabled for the given market. If trading is disabled or there is an outage then SPREAD is not updated.

Note: Bullish reserves the right to change the above methodology without prior notice.

Mark Price vs. Index Price vs. market price

Type Overview Methodology
Mark Price Fair value of a perpetual contract, used for liquidations, funding calculations, and risk management. Exponential moving average (EMA) of last traded price with 20 second half life.
Index Price Consensus price of a given asset across a number of reputable exchanges, used in funding calculations and risk management. Bullish exchange periodically snapshots the median of multiple external prices, excluding those that are not considered live or have significantly deviated from the median. Finally, an exponentially weighted moving average with a 20-second half-life is applied.
Market Price Current price of a given market that is being traded in the Bullish exchange. Median of the last traded price, bid and offer of the given market.


Note: Bullish reserves the right to change the above methodologies without prior notice


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