Mechanics explained · Non-custodial

Mark Price vs Last Price: Why Your Liquidation Uses a Different Number

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Last Price vs Mark Price: Core Definitions

If you’ve ever been liquidated at a price you never saw on the candle chart, the difference between last price and mark price is the reason. These two metrics both look like "the price" of a perp contract, but they serve completely different purposes.

Last price is the price of the most recent trade executed on the perp venue’s order book. It is the number plotted on candle charts, the ticker you see updating in real time, and the price that determines where your orders fill. It can shift sharply for very short periods if a single large order hits a thin order book, even if the broader market’s view of the asset’s value has not changed.

Mark price is a derived, smoothed measure of the perp contract’s fair value, designed to be resistant to short-term noise from individual trades. Most perp venues calculate it using a formula that anchors to the underlying asset’s broad market value, often combining the perp order book’s mid-price with funding rate data and/or a weighted average of prices across major spot exchanges. It is not tied to any single executed trade.

Why Venues Use Mark Price for Liquidations

Perpetual futures allow traders to use leverage, which means positions can be liquidated if their margin falls below the maintenance threshold. If venues used last price to trigger liquidations, the system would be vulnerable to unfair, noise-driven liquidations.

A single large order, a momentary gap in order book liquidity, or a manipulative trade could push the last price to an extreme level for a fraction of a second, only for the price to bounce back immediately. In that scenario, hundreds of traders could be liquidated even though the asset’s actual market value never meaningfully moved. Mark price solves this problem by tying liquidation triggers to a broader, harder-to-distort measure of value, so liquidations only occur when the fair market value of the asset has shifted enough to justify them. This is the standard approach across nearly all perp trading venues, not a quirk of any single platform.

How Mark Price Stops Single Wick Liquidations

The core benefit of mark price is its ability to filter out the noise of fleeting order book wicks. To see how this works, consider a scenario where a perp contract is trading near a familiar price level, but the order book has very few resting orders between that level and a much lower price point.

A single large sell order hits the book, wiping out those thin resting offers and pushing the last price sharply lower for a fraction of a second. Buy orders immediately step in, pushing the last price almost all the way back to its prior level. If liquidations used last price, any trader with a long position and a liquidation threshold partway down that wick would have lost their position, even though the broader market barely moved.

With mark price, that single fleeting trade has almost no impact on the calculated fair value. The mark price stays near its pre-wick level, so those positions remain open as long as the broader market value stays above their liquidation threshold. This protection is particularly important for low-liquidity assets, where order book gaps are more common.

Why Unrealized PnL Uses Mark But Fills Use the Order Book

This deliberate split between two "price" numbers often confuses new traders, but it serves two distinct, necessary purposes.

Fills happen at the order book’s last price (or better, depending on your order type) because execution requires matching with another trader’s resting order. When you open or close a position, you are transacting at a real, agreed-upon price with a counterparty, so your realized PnL is always based on your actual fill prices.

Unrealized PnL and liquidation checks, by contrast, are accounting measures used to track the health of your margin. If unrealized PnL were tied to last price, it would jump wildly up and down on every small wick, making margin calculations unstable and impossible to plan around. Mark price provides a consistent, low-noise measure of your position’s estimated value for margin purposes.

It is normal for your unrealized PnL to differ slightly from what you would get if you closed the position immediately, because closing would execute at the order book’s bid or ask, not the mark price. Think of unrealized PnL as a running estimate, not a final payout number.

The Honest Limitation: Mark Price Can Still Move Fast in Real Sell-Offs

Mark price filters out single-trade noise, but it is not a static or "slow" price, and it does not prevent liquidations during genuine market volatility. When there is a broad-based sell-off or rally across both spot and perp markets, mark price will move just as quickly as the broader market.

For example, if a major macro news event triggers widespread selling across every major exchange, mark price will drop sharply because the fair value of the asset is actually falling. In that scenario, you can still be liquidated even if your venue’s last price chart shows a gap or wick, because the mark price is reflecting the full scope of the market move.

Mark price calculations also vary by venue, as each platform uses its own formula and data sources. Always check a venue’s current documentation to understand exactly how its mark price is derived.

How This Works on Trending

On Trending, all perp positions settle on Hyperliquid, and every fill and liquidation is publicly verifiable on-chain. The liquidation price for any position is shown to you before you confirm your order, so you can review the exact mark price level that would trigger a liquidation before you enter a trade.

As with all perp venues, unrealized PnL on Trending tracks mark price for margin stability, while actual entry and exit fills are executed at the order book’s prevailing prices. If you ever want to verify a liquidation or fill, you can cross-check the event against the on-chain record.

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