Mark Price & Last Price

What's the difference between mark price and last price?

Last Price

The "last price" refers to the most recent traded price of a perpetual contract. It is the price shown in the order book during trading that reflects the real-time traded price.

A perpetual contract has its own supply and demand, as traders continuously buy and sell contracts on NFEX. This creates a unique price for the contract that may differ from the spot price of the underlying asset. As a result, the last price of the perpetual contract can gradually deviate from the actual price of its underlying asset.

To ensure more stable and reliable pricing for the floor price of a given NFT collection, NFEX utilizes the Mark Price.

Mark Price

The mark price of a perpetual contract is an estimated fair value that considers the underlying asset's reasonable worth, aiming to prevent unwarranted liquidation resulting from market manipulation or illiquidity.

$$Mark Price = Median( Impact Mid, Price 1, Price 2)$$

Where:

$Impact Mid = Average (Impact Bid Price, Impact Ask Price)$

Where:

• $ImpactBidPrice$= The average fill price to execute the Impact Notional on the Bid side

• $ImpactAskPrice$= The average fill price to execute the Impact Notional on the Ask side

• $The Impact Notional$ is used to determine how deep in the order book to measure either the Impact Bid or Ask Price and is set to 5 ETH. Please note that the Impact Notional is subject to change according to market conditions.

$Price 1=NFEXI\times (1+FR_{Last} \times \frac{T}{3600})$

Where:

• $T$ is the time(Second) left until next funding
• $FR_{Last}=Last Funding Rate$

$Price 2$= Moving Average Of Impact Mid Over Last 5 Minutes

The mark price is used for:

• Unrealized PnL calculations. Please note that Realized PnL is still based on the actual executed market price.

• Liquidation. Liquidation happens when a position's liquidation price is hit by the Mark Price. The use of Mark Price safeguards users from unjust liquidations caused by a temporary fluctuation in the Last Price, when in fact, the asset's spot price hasn't reached the liquidation threshold.

Difference among last price, mark price and index price

Type	Last Price	Index Price	Mark Price
Function	Displays the last traded price of the order book on a real-time basis	Reflects the fair last spot price	Safeguard traders from unnecessary liquidation Calculate unrealized PnL and liquidation
Calculation	/	$NFEXI =\frac{Floor Price+Top Bid}{2}$	$Mark Price = Median(Impact Mid, Price 1, Price 2)$

Mark Price is not used in the actual trading and can be regarded as an indicator that monitors a position’s risk, while the Last Price is the essential market price that every user trades on.

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