The OKX derivatives platform has introduced a Mark Price System for its delivery contracts to enhance market fairness, reduce forced liquidations, and mitigate risks from short-term price manipulation. This update, rolled out to improve user experience and platform resilience, replaces the previous method of using the latest traded price with a more stable and representative mark price for calculating unrealized profit and loss (PnL), margin requirements, and settlement values.
This article explains how the mark price system works, its benefits, and how it impacts traders—especially those engaged in futures and delivery contract trading. We’ll also explore the technical formula behind the mark price and answer common questions about its implementation.
What Is the Mark Price and Why Does It Matter?
The mark price is a calculated value that reflects the fair market price of a derivative contract. Unlike the last traded price—which can be temporarily skewed by large orders or market manipulation—the mark price uses a more robust methodology to represent true market equilibrium.
Key Functions of the Mark Price
- Calculates unrealized PnL for open positions
- Determines liquidation triggers based on margin levels
- Sets final settlement price at contract expiry
By using the mark price instead of the last traded price, OKX reduces the risk of unfair liquidations caused by brief price spikes or flash crashes.
👉 Discover how advanced pricing models protect your futures trades
How Is the Mark Price Calculated?
The mark price on OKX combines two core components: the spot index price and the moving average (MA) of the basis.
Mark Price Formula
Mark Price = Spot Index Price + MA(Basis)Where:
- Spot Index Price: The average price of the underlying asset across major spot exchanges
- Basis = (Mid-price of futures contract – Spot Index Price)
- Mid-price = (Best Bid + Best Ask) / 2
The system applies a moving average to the basis to smooth out short-term volatility. This ensures that sudden, artificial price movements don’t distort the mark price.
Why Use a Moving Average?
Without smoothing, extreme bids or asks could momentarily push the mid-price far from fair value. The MA filter absorbs these anomalies, making the mark price more resistant to manipulation and reducing unnecessary liquidations.
Impact of the Mark Price System on Trading
1. Unrealized Profit and Loss Calculation
Before the mark price system:
- Long positions:
Face Value × Contracts / Entry Price – Face Value × Contracts / Last Traded Price - Short positions:
Face Value × Contracts / Last Traded Price – Face Value × Contracts / Entry Price
After implementation:
- Long positions:
Face Value × Contracts / Entry Price – Face Value × Contracts / Mark Price - Short positions:
Face Value × Contracts / Mark Price – Face Value × Contracts / Entry Price
Using the mark price prevents sudden swings in unrealized PnL due to manipulated trades, giving traders a more accurate reflection of their position’s health.
2. Forced Liquidation Mechanism
Liquidation occurs when a trader’s margin falls below required thresholds:
- 10x leverage: Liquidation triggered if margin ratio ≤ 10%
- 20x leverage: Liquidation triggered if margin ratio ≤ 20%
Now, the unrealized PnL used in margin ratio calculations is based on the mark price, not the last traded price.
Margin Ratio Formulas
- Isolated Margin:
(Fixed Margin + Unrealized PnL) / Initial Margin - Cross Margin:
(Account Balance + Realized PnL + Unrealized PnL) / (Required Position Margin + Frozen Order Margin)
This change makes liquidations more predictable and less susceptible to front-running or spoofing attacks.
👉 Learn how smarter margin systems keep your positions safer
3. Settlement Price Update
Prior to the update:
- Weekly delivery contracts settled using the last traded price at 16:00 UTC on Friday
With the new system:
- Settlement uses the mark price at 16:00 UTC on Friday
This ensures a fairer outcome by avoiding scenarios where a single large trade distorts the final settlement value.
4. API Access for Real-Time Data
Traders using algorithmic or automated strategies can access real-time mark price data via:
- WebSocket v3 Mark Price Channel: Delivers live updates with low latency
- REST API: A dedicated endpoint for retrieving mark prices (available shortly after launch)
Developers are encouraged to integrate this data into their risk management systems for more accurate position tracking and execution logic.
👉 Access real-time contract data through advanced API tools
Core Keywords Integrated Naturally
This update revolves around several essential concepts critical to futures trading:
- Mark price system – The central innovation improving pricing accuracy
- Delivery contracts – The product category affected by this change
- Unrealized PnL calculation – A key metric now tied to mark price
- Forced liquidation – Made more stable and fair under the new model
- Settlement mechanism – Now aligned with index-based pricing
- Basis smoothing – The technical method reducing volatility noise
- Margin ratio – Recalculated using reliable reference prices
- API integration – Enables real-time monitoring and automation
These keywords reflect both user search intent and technical depth, supporting strong SEO performance while delivering valuable insights.
Frequently Asked Questions (FAQ)
Q1: What problem does the mark price solve?
A: It prevents malicious traders from manipulating the last traded price to trigger unfair liquidations. By using a smoothed index-based reference, OKX ensures positions are closed only when genuinely undermargined.
Q2: Can I still see the last traded price?
A: Yes. The last traded price remains visible for market analysis, but it no longer affects PnL or liquidation calculations—only the mark price does.
Q3: Does this affect all contract types?
A: This update applies specifically to delivery contracts. Perpetual contracts may have separate mark price mechanisms, but they follow similar principles.
Q4: How often is the mark price updated?
A: The mark price is updated continuously in real time, with data fed from multiple sources including spot indices and order book mid-prices.
Q5: Will this reduce my chances of being liquidated?
A: Yes—in volatile or manipulated markets, the mark price typically changes more gradually than the last traded price, giving your position more breathing room during temporary spikes.
Q6: Is there a lag in the moving average? Could that create discrepancies?
A: While there is a slight smoothing delay, it’s designed to filter out noise without significantly deviating from fair value. Historical testing shows improved stability with minimal tracking error.
Final Thoughts
The introduction of the mark price system marks a significant step forward in making crypto derivatives trading safer and more transparent. By decoupling critical metrics like PnL and liquidation triggers from easily manipulated data points, OKX enhances trader confidence and platform integrity.
Whether you're a casual trader or running high-frequency strategies, understanding how mark prices work—and integrating them into your risk models—is essential for long-term success in futures markets.
As digital asset trading evolves, platforms that prioritize fairness, accuracy, and resilience will lead the way. OKX’s move reflects that vision, setting a standard others are likely to follow.