Three Essential Prices to Know in Futures Trading: Index Price, Mark Price, Latest Transaction Price

Many futures beginners get confused as soon as they open the trading interface—why are there three different prices for the same trading pair? What’s the difference between these three prices, and which one is the “real price”?

Index Price: The Mirror Reflecting the Market’s True Value

In simple terms: The index price is the weighted average of spot prices from major exchanges across the entire network.

For example, the BTC index price is calculated by taking real-time spot prices from exchanges like Binance, OKX, Kraken, etc., and then computing a volume-weighted average. The benefits of this design are:

• No single exchange can manipulate the price (no worries about a specific exchange being attacked or experiencing abnormal volatility)
• It can promptly reflect the true market demand
• It serves as a fairer reference standard for forced liquidations

Anti-cheating mechanism: If a particular exchange’s quote deviates from the network median by more than ±1%, or its data is severely delayed, that exchange will be temporarily excluded from the calculation, and will only be added back once data returns to normal.

Fair Price (Mark Price): The Safety Cushion for Your Account

This is key: Mark Price = Index Price + Funding Rate Premium + Moving Average of Bid-Ask Spread, and the median of these three is used.

Why so complicated? Because when the market is highly volatile or liquidity is insufficient, spot prices and futures prices can diverge significantly. If liquidation were determined solely by the last traded price, it could trigger many unnecessary forced liquidations. The mark price is designed to prevent this—it smooths out market noise, making liquidation judgments more stable and rational.

Important Note: The mark price only affects liquidation and unrealized PnL calculations; it does not impact your actual profit or loss. In other words, the moment your order is executed, your PnL is already set, regardless of the mark price.

Last Price: The Real-Time Pulse of the Trading Pair

The simplest: It’s the price at which someone just traded with real money on this trading pair.

The Practical Relationship Between the Three Prices

Under normal conditions: Last Price ≈ Mark Price ≈ Index Price (all three fluctuate within a reasonable range)

Under abnormal conditions:

• Extreme market volatility → Last Price may plunge → Mark Price buffers → Index Price remains the most stable
• Single exchange malfunction → Index Price is unaffected (since it’s weighted across multiple exchanges), but Last Price may be abnormal

How to Switch Between These Three Prices

Web Version: Open futures trading → There are three dropdown menus above the candlestick chart, click to switch

App Version: Enter futures → Tap the candlestick icon in the upper right → Switch to landscape mode → Use the price dropdown menu in the upper right

Suggestion: Beginners should mainly use the mark price as a reference (since it’s the smoothest), keep an eye on the index price to avoid extreme situations, and use the last price to verify actual trades. By using all three prices together, you can truly understand what’s happening in the market.