Below, we will explain the differences between these two types of prices, their corresponding usage scenarios, and specific setup methods to help you better manage position risks!
Pionex futures contracts support selecting different trigger price types when setting up TP/SL orders to achieve flexible orders and meet different trading strategy needs. Whether setting up TP/SL orders when placing an order or holding a position, you can choose “Last Price” or “Mark Price” as the trigger price type. However, different trigger price types will have different impacts.
Contents
1. What are “Last Price” and “Mark Price”?
Last Price (also known as “Latest Market Price”) refers to the latest transaction price of the contract. Traditional futures contracts usually use “Last Price” to mark positions. However, market prices may experience abnormal fluctuations due to malicious manipulation or lack of liquidity.
To avoid this situation, Pionex futures introduce “Mark Price”, which uses a reasonable price (rather than the latest transaction price) to mark the contract. In addition, the reasonable mark price is calculated based on the spot index price and the bid and ask prices of the contract, only affecting the liquidation price and unrealized PnL.
For example, on the Pionex futures Web:
2. Applicable Scenarios and Pros & Cons
1) Using “Last Price” as the trigger price
- Advantages: This method can make the trigger price of TP/SL orders closer to the final transaction price.
- Disadvantages: Since liquidation is triggered by “Mark Price” rather than “Last Price”, there may be a situation where “Mark Price” triggers liquidation before “Last Price” touches the stop loss price. Especially when the stop loss price set is close to the liquidation price, there will be a greater impact.
For example: User A holds a long position in “BTCUSDT Perpetual” with an opening price of 28,000 USDT, a liquidation price of 25,970 USDT, and the current BTC price of 27,000 USDT.
A is worried that the BTC price will further decline and chooses to set a stop loss using “Last Price” with a trigger price of 26,000 USDT. However, in the face of a market volatility, “Mark Price” triggers liquidation first, but the stop loss order based on “Last Price” has not yet been triggered, so the position is liquidated first and the stop loss is not effective.
2) Using “Mark Price” as the trigger price
- Advantages: Using “Mark Price” to set up TP/SL orders can reduce the risk of being liquidated even if a stop loss price is set.
- Disadvantages: The price used for executing the order is”Last Price”. By setting up a TP/SL triggered by “Mark Price”, there may be a price difference between “Mark Price” and “Last Price”, resulting in a difference between the final execution price of the stop loss order and the expected transaction price.
3) Applicable Scenarios
Therefore, “Last Price” and “Mark Price” have their own advantages and disadvantages. It is recommended that traders choose the trigger type according to their own needs:
- If you want the actual trigger price to be closer to the expected transaction price, it is recommended to choose “Last Price” as the trigger type for “Take Profit” orders. This can also facilitate faster order execution and capture every change in the market.
- It is recommended not to set the stop loss price too close to the liquidation price. Using “Mark Price” as the trigger type can also reduce the risk of being liquidated even if a stop loss price is set.
- It is recommended to set up TP/SL orders when placing an order, which is not only convenient to operate but also reduces the risk of sudden price fluctuations when placing an order.
3. How to Switch between “Last Price” and “Mark Price”?
Whether on the app or web page, you can set the trigger price type for TP/SL orders when placing an order or holding a position:
App
Web
