What is the difference between the mark price and the last traded price on Bybit?

Understanding the Basics of Price Types on Bybit

When trading on Bybit, users encounter multiple price indicators, among which the mark price and the last traded price are two of the most critical. These values serve different purposes in the trading interface and affect risk management, liquidation calculations, and trade execution. The last traded price refers to the actual price at which the most recent transaction occurred on the order book. It reflects real-time market activity and is updated with every executed trade. In contrast, the mark price is not a direct transaction price but a calculated value designed to represent the fair value of a contract, derived from external spot or futures indices and funding rate adjustments.

How the Last Traded Price Functions

The last traded price is straightforward: it is the price of the latest executed trade on Bybit’s matching engine. For example, if a user buys 1 BTCUSD perpetual contract at $43,500, that becomes the new last traded price. This value appears prominently on the trading chart and in the market data panel. It is highly sensitive to immediate market orders and can fluctuate rapidly during periods of high volatility or low liquidity. Because it reflects actual trades, it is considered a real-time indicator of market sentiment. However, this also means it can be susceptible to short-term manipulation or price spikes caused by large market orders, especially in less liquid markets. Traders often use the last traded price to place limit or market orders, as it represents the current executable market level.

How Bybit Calculates the Mark Price

The mark price is designed to prevent unfair liquidations and reduce the impact of price manipulation. Bybit calculates it using a multi-step process that incorporates several data sources. The primary component is the index price, which aggregates the spot prices of BTC (or other assets) from major exchanges such as Binance, Coinbase, Kraken, and Bitstamp. This index is weighted to minimize outliers and ensure stability. The second component is the fair price adjustment, which accounts for the difference between the perpetual contract’s funding rate and the spot market. Bybit applies a decay mechanism to the funding rate differential, ensuring the mark price gradually converges toward the index price over time. This prevents traders from exploiting funding rate imbalances. The formula used is:

• Mark Price = Index Price × (1 + Fair Premium)

Where the fair premium adjusts based on the prevailing funding rate and time to funding settlement.

Why the Mark Price Matters for Risk Management

One of the most important roles of the mark price is in determining liquidation levels and unrealized profit and loss (PnL) calculations. Bybit uses the mark price, not the last traded price, to calculate a trader’s current position value and margin status. This design protects traders from being liquidated due to temporary price spikes or flash crashes on the order book. For example, if the last traded price suddenly drops to $40,000 due to a large sell order, but the mark price remains at $43,200 based on the index, a long position will not be liquidated unless the mark price itself reaches the liquidation threshold. This system enhances fairness and reduces the risk of whale manipulation in thin markets. Additionally, unrealized PnL is calculated as:

• Unrealized PnL = (1 / Entry Price – 1 / Mark Price) × Position Size (for inverse contracts)

This ensures that profit calculations reflect a more stable and representative market value.

Practical Differences in Trading Scenarios

In real trading conditions, the divergence between the last traded price and the mark price can create confusion for new traders. Consider a scenario where a sudden burst of sell orders pushes the last traded price down 5% in seconds. While the order book reflects this drop, the mark price may only decline by 1% due to its reliance on the broader index. This discrepancy means:

• Positions are not liquidated immediately even if the last traded price hits the liquidation level.
• Take-profit and stop-loss orders are triggered based on the last traded price, not the mark price.
• Funding payments are calculated using the difference between the mark price and the index price.

Traders must monitor both values simultaneously. A growing gap between them may indicate market stress or low liquidity. For instance, during a major news event, the last traded price might spike while the mark price lags, creating temporary arbitrage opportunities. However, attempting to exploit such gaps carries risk, as the mark price will eventually converge with the index.

How to View These Prices on Bybit’s Interface

To access both the mark price and the last traded price on Bybit:

• Log in to your Bybit account and navigate to the Derivatives section.
• Select the desired contract, such as BTCUSD Perpetual.
• On the trading interface, locate the price panel above the order book.
• The last traded price is displayed prominently in large font, often with color coding (green for up, red for down).
• Hover over or click the price to reveal additional data, including the mark price, which is usually labeled as “Mark” or shown with a separate indicator.
• Alternatively, check the position panel if you have an open trade; the mark price is listed under “Mark Price” and is used to calculate your current margin ratio and liquidation price.

Some advanced users enable price alerts for both values through Bybit’s API or third-party tools to monitor deviations in real time.

Frequently Asked Questions

Can the mark price ever be higher than the last traded price?Yes. If the index price rises due to strong spot market momentum, the mark price may increase even if the last traded price remains flat or drops due to selling pressure on Bybit. This often occurs during periods of high spot-futures basis divergence.

Does Bybit update the mark price in real time?Yes. The mark price is recalculated every second using real-time data from the index and funding rate inputs. It is continuously synchronized with external exchange feeds to maintain accuracy.

Why doesn’t my liquidation price change when the last traded price moves?Because Bybit uses the mark price, not the last traded price, to calculate liquidation levels. Even if the last traded price fluctuates sharply, your liquidation price only changes if the mark price moves significantly.

Is the mark price the same across all perpetual contracts for the same asset?Generally yes. Bybit maintains a consistent mark price calculation method across all contracts for a given asset (e.g., BTCUSD). However, slight variations may occur if different contracts use different index compositions or funding mechanisms, though this is rare on Bybit’s platform.