Perp markets often show several prices at once: mark price, index price, and last traded price. They sound interchangeable, but they do different jobs.
Understanding the difference helps you read a perp screen without guessing which number controls your liquidation risk.
Index price
The index price is a reference price for the underlying asset. It is usually built from one or more spot markets or oracle sources. The goal is to answer: what is the asset worth outside this specific perp order book?
For major assets, the index can be relatively stable because there are many liquid markets. For newer or thinner assets, index quality matters more.
Last price
The last price is the most recent trade on the perp market. It tells you where the latest buyer and seller matched. It is useful for execution context, but it can be noisy if liquidity is thin or one trade prints far from fair value.
Mark price
The mark price is the fair-value price used for margin and liquidation calculations. It usually blends index price and perp market information in a way designed to reduce manipulation from a single odd trade.
If you are managing liquidation risk, mark price is the number to watch.
Why the differences matter
A perp can briefly trade above or below the underlying market. That gap is called a premium or discount. If the last price jumps but the mark price barely moves, your liquidation risk may not change as much as the chart suggests. If the mark price moves against you, your margin health changes even if the latest trade looks less dramatic.
Quick reading habit
- Use index price to understand the outside reference market.
- Use last price to understand recent execution.
- Use mark price to understand margin and liquidation risk.
- Watch the premium between perp and index when funding gets extreme.
Risk note: Liquidation calculations can use mark price, not the price you expected from the last candle. This article is educational content, not financial advice.