Index Price and Mark Price

1. Index Price

The U-standard contract index price is based on the spot market prices of six exchanges (H uobi, OKX, Binance, Kucoin, Mexc, Gate) . For example, the BTCUSDT perpetual contract index on the Ubit platform uses the BTC/USDT spot prices of multiple exchanges, and is obtained by weighted average according to the transaction volume weight.

Calculation rules

If the spot price of any exchange deviates from the median of all exchanges by ±3%, the spot price data of this exchange will be eliminated; however, if the prices returned by more than three exchanges deviate, the price will be regarded as the valid price.

If the market data of an exchange is updated slowly for a long time or the price deviates from the preset ratio , the spot price data of this exchange will be eliminated.

If the data quality of the removed exchange is restored , its original data weight will be restored .

If the price exceeds the median by ±3% when connected to 3 or more exchanges, the reference price will be calculated as median*(1.03/0.97);

If only one or two exchanges are connected, the weighted calculation is performed directly according to the rules.

If the index price calculation is abnormal, or all sources are kicked out, the market middle price [( Bid1 + Ask1 ) / 2] will be used as the index price.

2. Mark Price

Traditional futures contract trading usually uses the latest transaction price to mark positions (for example, market value), and the latest transaction price may deviate from the price index due to market manipulation or lack of liquidity, triggering unnecessary forced liquidation. In order to improve the stability of the contract market and reduce unnecessary forced liquidation when the market fluctuates abnormally, we use the mark price to calculate the user's unrealized profit and loss.

The mark price of perpetual contracts is calculated using the funding basis rate:

Mark Price = MEDIAN (Mark Price 1, Mark Price 2, Contract Last Transaction Price )

in:

Funding basis rate = funding rate at the last settlement point * (time until the next funding payment / funding interval)

Mark Price 1 = Index Price * (1 + Funding Basis Rate)

Mark Price 2 = Index Price + MA (30-minute basis) (( Bid1 + Ask1 ) / 2 - Index Price)

MA (30-minute basis) = Moving Average (( Bid1 + Ask1 )/2 - Index Price)

The mark price takes into account the moving average of the spot index price and the basis. The moving average mechanism smoothes out contract price fluctuations in a short period of time and reduces unnecessary forced liquidations caused by abnormal fluctuations.