# Mark price

> The mark price is a venue-calculated fair-price estimate used for functions such as unrealized PnL, margin checks, and liquidation. It is designed to be harder to distort than a single last trade. Its formula commonly references an index price and market premium, but the exact inputs, bounds, and update rules vary.

- Canonical page: https://lynx.finance/glossary/mark-price/
- Published: 2026-07-31
- Updated: 2026-07-31
- Last reviewed: 2026-07-31
- Written by: Lynx Editorial
- Technical review: Lynx Protocol Team
- Category: Pricing and execution
- Also known as: fair price, futures mark
- Related terms: [Index price](https://lynx.finance/glossary/index-price/), [Liquidation](https://lynx.finance/glossary/liquidation/), [Realized and unrealized PnL](https://lynx.finance/glossary/realized-and-unrealized-pnl/), [Funding rate](https://lynx.finance/glossary/funding-rate/)
- Related articles: [On-chain perpetual futures, explained](https://lynx.finance/blog/onchain-perpetual-futures-explained/), [Crypto liquidation explained: what happens and who gets the money](https://lynx.finance/blog/crypto-liquidation/)

## In plain English

The last trade shows where one transaction happened. It may be stale, unusually small, or briefly far from the broader market. The mark price gives the risk system a more stable value for calculating the position’s condition.

The mark is not necessarily a price at which the trader can execute. Closing still depends on the venue’s available liquidity and order or pricing model.

## How it works

A common design starts with an [index price](https://lynx.finance/glossary/index-price/) assembled from external spot markets, then applies a bounded premium or basis derived from the perpetual market. Some designs add smoothing, impact-price inputs, or other protections.

The venue then uses the mark to calculate [unrealized PnL](https://lynx.finance/glossary/realized-and-unrealized-pnl/) and compare account equity with maintenance requirements. Because formulas differ, “mark price” should be read as a defined venue value, not a universal calculation.

## Why it matters

Liquidation risk can change even when the last-traded price shown on a chart does not. A trader checking only the chart may misunderstand why unrealized PnL or the liquidation estimate moved. The mark, index, and executable price answer different questions.

## Worked example

Suppose the index price is `$60,000`. A small last trade occurs at `$60,900`, but the venue’s bounded premium calculation produces a mark price of `$60,100`.

The risk engine may value a `0.20 BTC` long at `$60,100` for unrealized PnL and margin, not at the `$60,900` last trade. Closing the position could still produce another price entirely.

## How it works on Lynx

Lynx documentation does not define a separate mark-price series like some order-book venues. It describes an oracle entry price and an oracle reference price for open-position PnL, with the oracle price also used when a trade closes.

For Lynx, do not assume a chart’s latest trade is the risk-accounting price. The oracle reference, entry price, artificial opening spread, and final close price answer different questions.

## Common misconception

> Mark price, index price, and execution price are not synonyms. The mark serves risk accounting; the index represents a reference market; execution determines the actual trade result.

## Sources

- [What is the funding rate?](https://help.coinbase.com/en/international-exchange/funding/what-is-the-funding-rate) — Coinbase International Exchange (primary)
- [Perpetual-style futures settlement and other mechanics](https://help.coinbase.com/en/derivatives/perpetual-style-futures/settlement-and-other-mechanics) — Coinbase (technical)
- [Gross Profit and Loss (P&L)](https://lynx-finance.gitbook.io/lynx-finance/welcome-to-lynx/core-design/gross-profit-and-loss-p-and-l) — Lynx Finance (primary)