Key Takeaways
- Multiple price types exist in futures trading, and each serves a different functional purpose.
- Forced liquidation is not triggered directly by the last traded price, but by the more stable mark price.
- The mark price is derived from the index price and funding-related mechanisms to reduce the impact of short-term abnormal volatility.
- Price spikes or “wicks” do not necessarily reflect genuine market price changes, but they may affect risk perception.
- On futures trading platforms such as BitMart, understanding price mechanisms helps traders avoid unexpected liquidation.
Why Are There Different Prices In Futures Trading?
In futures trading, many beginners notice a common phenomenon:
At the same moment, the trading interface may display the last traded price, mark price, and index price, and these values are not always identical.
This is not a system error. Rather, it is a deliberate risk control design built into futures trading itself. On platforms like BitMart, different prices serve different purposes—reflecting executed trades, overall market price levels, and liquidation reference benchmarks respectively.
When these prices are treated as interchangeable, misunderstandings about liquidation triggers and profit-and-loss fluctuations can easily arise.
Why Isn’t The Last Traded Price Used For Liquidation?
At first glance, using the last traded price as the liquidation reference may seem intuitive. However, in real market conditions, this approach can actually amplify risk.
The last traded price reflects the price of a single executed trade at a specific moment. During periods of low liquidity, concentrated order execution, or extreme market conditions, this price may deviate significantly from the broader market level—what traders often refer to as a “price spike” or “wick.”
If forced liquidation were based directly on the last traded price, isolated abnormal trades could trigger large-scale liquidations even when the overall market price has not meaningfully changed.
This type of risk does not stem from incorrect market judgment, but from price noise itself.
For this reason, futures trading platforms such as BitMart do not use the last traded price as the direct basis for liquidation.
The Role Of The Mark Price: Filtering Short-Term Noise
To address this issue, futures trading introduces the concept of the mark price.
The mark price is not derived from a single market’s latest execution. Instead, it is calculated based on the index price, with adjustments from mechanisms such as funding-related parameters. Its core purpose is to reflect a smoother and more reliable representation of the market’s fair price—rather than short-term abnormal fluctuations.
In BitMart’s futures trading system, whether a position triggers forced liquidation is primarily determined by the mark price, not the last traded price. This design significantly reduces the likelihood of positions being liquidated due to momentary liquidity gaps or extreme individual trades.
Index Price: A Composite Market Reference
The index price is typically calculated by aggregating prices from multiple major spot markets and applying weighted averages. Rather than relying on a single exchange, it reflects the broader market’s consensus price for a given asset.
Because its data sources are more diversified, the index price is less sensitive to isolated abnormal trades and more resistant to short-term manipulation. This is why the mark price usually takes the index price as its foundation, rather than directly referencing any single platform’s last traded price.
On platforms such as BitMart, this design does not eliminate risk—but it ensures that risk originates from genuine market movements, rather than from structural price noise.
How To Understand And Avoid “Wick-Driven” Liquidation Misjudgment
One important point should be clearly understood:
A price wick does not necessarily indicate a real change in market trend.
If position risk assessment relies solely on the last traded price, short-term abnormal volatility may distort decision-making and lead traders to misjudge how close they are to liquidation. The existence of the mark price is specifically intended to reduce this probability.
To avoid misjudgment caused by price spikes, traders should keep the following in mind:
- Forced liquidation is primarily based on the mark price
- Position risk should be evaluated using the mark price
- Short-term abnormal trades do not equal overall market direction
When trading futures on BitMart, understanding the functional boundaries of each price type helps traders form more stable risk expectations, rather than being driven by momentary fluctuations.
Price Mechanisms Are Part Of Risk Control
The last traded price, mark price, and index price are not designed to complicate trading. They are essential components of risk control in a high-leverage futures environment.
Futures trading inherently amplifies volatility. If price noise were added on top of leveraged exposure, risk would become significantly harder to control. Only by understanding price mechanisms can futures trading on platforms like BitMart become a fairer and more predictable trading method.
