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    Enter keywords to find answers > Help Center > Futures > Logical Mechanism of Perpetual Contracts
    More article in the group
    Instructions of Dual-Price Mechanism(Mark Price & Last Traded Price)
    Updated at:266 days 13 hours ago
    lv applies the 'Dual-Price mechanism' in contract trading, Dual-Price Mechanism consists of Mark Price & Last Traded Price.

    To avoid the unnecessary liquidation of traders' positions and combat the market manipulations, uses the mark price to determine the liquidation of traders' positions, instead of the last traded price.

    Additionally, using mark price also helps anchor to the intraday trading price and external spot price. For example, the price of spot trading is 5,000USD and the intraday trading price is around 5,010USD. It's more likely to be forced to liquidation if traders go long (opening a position at the price of 5,010USD) at this time. As a result, users are encouraged to go short, thereby bringing down the intraday price and approaching the external spot price.

    What is Mark Price?

    Mark Price is based on the weighed price of the external market, plus a decaying funding basis rate over time.

    Calculation of Mark Price:

    Funding Basis = Funding Rate * Time Until Funding/Funding Interval Mark Price = Index Price * (1 + Funding Basis )

    What is Last Traded Price?

    Last Traded Price refers to the current market price of

    Risk Warning:

    The risk of the contract is relatively large. In a fluctuating market, the mark price may deviate from the current market price. Since the calculation of unrealized gain and loss is based on the mark price, the unrealized gains and loss displayed on the position may be inaccurate. The actual market price shall prevail. Please be reminded to keep an eye on the distance between Liquidation Price and Mark Price to prevent the liquidation caused by large fluctuations.

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