What are Mark Price and Price Index for U-margined Contracts?
In cryptocurrency contract trading, Mark Price aims to ensure the fairness and accuracy of contract pricing, helps reduce the risk of market manipulation, and reduces abnormal liquidations caused by abnormal volatility.
- Mark Price vs. Latest Transaction Price
Latest Transaction Price: Based on the most recent transaction price in the contract market, may be affected by market sentiment and fluctuate significantly.
Mark Price: Uses a more stable calculation method to avoid misjudgment caused by short-term abnormal volatility.
- Mark Price Calculation Method
BiyaPay contract's Mark Price is determined by the following factors:
Latest Price: The latest transaction price in the contract market.
Order Book Price: The liquidity situation of bid price & ask price.
Funding Rate: The impact of funding fees on perpetual contracts.
Price Index: Weighted average spot price based on multiple major exchanges (such as Binance, OKX, Coinbase).
Price Index is the core of mark price calculation. It calculates the average value through price sources from multiple exchanges, thereby reducing the risk of market manipulation caused by abnormal volatility of a single exchange.
- Role of Mark Price
Prevent Abnormal Market Volatility: Avoid price anomalies caused by short-term large orders or low liquidity.
Ensure Fair Liquidation: Reduce situations where forced liquidation (Liquidation) is triggered due to short-term price manipulation.
Improve Market Stability: Based on calculations from multiple exchange prices, making the contract market more transparent and fair.
BiyaPay adopts an advanced mark price mechanism to ensure users enjoy a fairer and more transparent market environment during trading.
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BIYA GLOBAL LLC is registered with the Financial Crimes Enforcement Network (FinCEN), an agency under the U.S. Department of the Treasury, as a Money Services Business (MSB), with registration number 31000218637349, and regulated by the Financial Crimes Enforcement Network (FinCEN).
BIYA GLOBAL LIMITED is a registered Financial Service Provider (FSP) in New Zealand, with registration number FSP1007221, and is also a registered member of the Financial Services Complaints Limited (FSCL), an independent dispute resolution scheme in New Zealand.