PNL

Understanding the difference between mark price and last price is crucial for NFT trading on Ariable perpetual swaps.

The last price is the most recently traded price of a perpetual contract, and it reflects the real-time traded price. While the last price is based on the supply and demand of the perpetual contract, it may deviate from the actual price of its underlying asset.

To ensure more stable and reliable pricing, Ariable uses the mark price, which is an estimated fair value of the perpetual contract that considers the reasonable worth of its underlying asset. The mark price helps prevent unwarranted liquidation resulting from market manipulation or illiquidity.

The mark price is used for unrealized PnL calculations and liquidation, ensuring that liquidations are not unjustified due to temporary fluctuations in the last price. However, the last price is still the essential market price that every user trades on, while the mark price is an indicator that monitors a position's risk and is not used in actual trading.