# Mark Price ⎊ Area ⎊ Resource 2

---

## What is the Valuation of Mark Price?

The mark price provides a more accurate valuation of a derivatives contract compared to the last traded price, which can be easily manipulated in low-liquidity conditions. This calculated price reflects the underlying asset's fair value across multiple markets. It prevents temporary price spikes on a single exchange from causing unnecessary liquidations.

## What is the Liquidation of Mark Price?

The mark price is critical for determining when a leveraged position should be liquidated. By using a robust mark price, exchanges ensure that liquidations occur only when a position truly falls below its maintenance margin requirement, rather than due to temporary market noise. This mechanism protects both the exchange and other traders from excessive losses.

## What is the Mechanism of Mark Price?

The calculation mechanism for the mark price typically involves a weighted average of prices from several major spot exchanges, often adjusted by a moving average to smooth out short-term volatility. For perpetual futures, the funding rate component is also integrated to align the mark price with the spot price over time.


---

## [Solvency Delta Preservation](https://term.greeks.live/term/solvency-delta-preservation/)

## [Liquidation Fee Model](https://term.greeks.live/term/liquidation-fee-model/)

## [Real Time Margin Calculation](https://term.greeks.live/term/real-time-margin-calculation/)

## [Real Time Margin Monitoring](https://term.greeks.live/term/real-time-margin-monitoring/)

## [Real-Time Margin Engine](https://term.greeks.live/term/real-time-margin-engine/)

## [Blockchain Order Books](https://term.greeks.live/term/blockchain-order-books/)

## [Real-Time Margin Adjustments](https://term.greeks.live/term/real-time-margin-adjustments/)

## [Order Book Finality](https://term.greeks.live/term/order-book-finality/)

## [Greeks Based Portfolio Margin](https://term.greeks.live/term/greeks-based-portfolio-margin/)

## [Funding Rate Manipulation](https://term.greeks.live/term/funding-rate-manipulation/)

---

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---

**Original URL:** https://term.greeks.live/area/mark-price/resource/2/