Mark price

【Mark price】

To enhance market stability and minimize unnecessary forced liquidations during market anomalies, WEEX uses the mark price to calculate users' unrealized profits and losses.

Mark Price = Spot index price + Moving average of basis

Moving average of basis

= Moving average (Futures mid-price - spot index price)

= Moving average ((Futures ask price + Futures bid price) / 2 - Spot index price)

The mark price considers both the spot index price and the moving average of the basis. The moving average mechanism smooths out short-term fluctuations in futures prices, helping to reduce unnecessary forced liquidations triggered by abnormal market movements.

You can think of the mark price as a trigger. It merely triggers an action when users have set stop-loss or take-profit orders. When triggered, it will be executed at the latest bid or ask price, depending on market depth.

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