On the Binance futures trading page, you'll see both "Last Price" and "Mark Price." Many people don't understand why there are two prices or how they affect positions. This article explains the difference. If you haven't opened futures yet, sign up for Binance and enable futures trading.
Last Price
The last price is the most recent trade's execution price. It updates with every new trade.
Characteristics:
- Reflects the latest transaction on Binance's futures market
- Can be affected by large orders, manipulation, or short-term volatility
- May fluctuate sharply
Mark Price
The mark price is a "fair price" calculated by Binance using a specific algorithm, drawing from multiple data sources.
Simplified calculation: Mark Price = Spot Index Price + Funding Rate Basis
Data sources:
- Weighted average of spot prices across multiple major exchanges
- Accounts for funding rate and time factors
Characteristics:
- More stable, harder to manipulate
- Reflects the market-wide fair price
- Not affected by anomalies on any single exchange
Why Does Mark Price Exist?
Preventing Manipulation
If only last price determined liquidations, someone could briefly crash the price on Binance with a massive sell order, artificially liquidating other users.
Example:
- Fair BTC price across exchanges: 60,000
- Someone dumps on Binance futures to 59,000
- If liquidation used 59,000, many positions would be unfairly liquidated
- Using mark price (~60,000), those users are protected
Protecting Users
Mark price is a protective mechanism ensuring your position isn't wrongly liquidated by brief price anomalies.
Where Each Price Is Used
| Function | Price Used |
|---|---|
| Unrealized PNL | Mark Price |
| Liquidation determination | Mark Price |
| Margin ratio calculation | Mark Price |
| Order execution | Last Price |
| Candlestick charts | Last Price |
| TP/SL triggers | Selectable (mark or last) |
Impact on You
1. Unrealized PNL May Differ from Expectations
The last price may show a big move, but unrealized PNL uses mark price. If there's a gap between them, displayed PNL might not match what you'd expect.
2. Liquidation Based on Mark Price
Whether you get liquidated depends on mark price, not last price. This is generally in your favor.
3. TP/SL Trigger Selection
When setting take-profit/stop-loss, choose the trigger:
- Stop-loss: Use mark price — avoids triggering on brief price wicks
- Take-profit: Can use last price — ensures quick execution
Is a Large Gap Normal?
Normal Range
A 0.01%–0.1% difference is typical.
Abnormal
A gap exceeding 0.5% or 1% may indicate:
- Extreme market volatility
- Liquidity issues on Binance futures
- Potential manipulation
Trade with extra caution during such conditions.
Summary
Mark price is Binance's fair price mechanism to protect traders. Your PNL and liquidation are based on mark price rather than the more easily manipulated last price. Understanding this distinction helps you better assess position risk and configure stop-losses.