Mark & Last Price

Last Price

The "last price" refers to the most recent traded price of a perpetual contract. It is the price shown in the order book during trading that reflects the real-time traded price.

A perpetual contract has its supply and demand, as traders continuously buy and sell contracts on Penals. This creates a unique price for the contract that may differ from the spot price of the underlying asset. As a result, the last price of the perpetual contract can gradually deviate from the actual price of its underlying asset.

To ensure more stable and reliable pricing for the floor price of a given NFT collection, Penals utilizes the Mark Price.

Mark Price

The mark price of a perpetual contract is an estimated fair value that considers the underlying asset's reasonable worth, aiming to prevent unwarranted liquidation resulting from market manipulation or illiquidity.

$$Mark Price = Median( Impact Mid, Price 1, Price 2)$$

Where:

$Impact Mid = Average (Impact Bid Price, Impact Ask Price)$

Where:

• $ImpactBidPrice$= The average fill price to execute the Impact Notional on the Bid side

• $ImpactAskPrice$= The average fill price to execute the Impact Notional on the Ask side

• $The Impact Notional$ is used to determine how deep in the order book to measure either the Impact Bid or Ask Price and is set to 5 ETH. Please note that the Impact Notional is subject to change according to market conditions.

$Price 1=PNI\times (1+FR_{Last} \times \frac{T}{3600})$

Where:

• $T$ is the time(Second) left until next funding
• $FR_{Last}=Last Funding Rate$

$Price 2$= Moving Average Of Impact Mid Over Last 5 Minutes

The mark price plays a crucial role in Penals' trading platform, serving two main purposes: unrealized PnL calculations and liquidation safeguards.

Unrealized PnL Calculations: The mark price is utilized in calculating unrealized profits and losses (PnL) for open positions. While realized PnL is based on the actual executed market price, unrealized PnL is determined using the mark price. This allows traders to assess the potential gains or losses of their positions in real time, providing valuable insights into their current investment performance.

Liquidation Safeguards: In the event of liquidation, the mark price serves as a safeguard to protect users from unjust liquidations triggered by temporary fluctuations in the last price. When a position's liquidation price is reached by the mark price, liquidation is triggered. By using the mark price instead of the last price, Penals ensures that users are not unfairly liquidated due to short-term market volatility. This mechanism provides a more accurate representation of the asset's spot price, safeguarding users' positions and mitigating the risk of unwarranted liquidations.

By incorporating the mark price into its trading platform, Penals enhances the fairness and stability of the market, allowing traders to manage their positions more effectively. The mark price enables accurate PnL calculations and protects users from unjust liquidations, providing a secure and reliable trading environment for NFT perpetual contracts.

Difference among last price, mark price and index price

Type	Last Price	Index Price	Mark Price
Function	Displays the last traded price of the order book on a real-time basis	Reflects the fair last spot price	Safeguard traders from unnecessary liquidation Calculate unrealized PnL and liquidation
Calculation	/	$PNI =\frac{Floor Price+Top Bid}{2}$	$Mark Price = Median(Impact Mid, Price 1, Price 2)$

Mark Price is not used in the actual trading and can be regarded as an indicator that monitors a position’s risk, while the Last Price is the essential market price that every user trades on.