Lesson 17: Mark Price vs Last Price โ Whatโs the Difference? ๐ท๏ธ๐
Understanding these two prices is key to avoiding unexpected liquidations and better trade timing. Letโs break it down ๐
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Last Price ๐
This is the most recent trade price on the futures market โ the actual price where buyers and sellers agreed to trade.
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Mark Price ๐
A calculated price Binance uses to avoid unfair liquidations.
Itโs based on the spot price + a fair funding rate adjustment.
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Why It Matters โ
Liquidations happen based on the Mark Price, not Last Price.
So even if the last price moves wildly, your position wonโt get liquidated unless the mark price hits the liquidation level.
Mark price keeps things fair and reduces manipulation risk.
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Pro Tip ๐ง
Always watch the Mark Price when managing your positions โ thatโs the real price that matters!
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Next lesson: Lesson 18 โ What Is Funding Rate Calculation & How Often It Happens ๐๐งฎ
