7. Mark Price & Index Price - Kraken Futures

Key points: - When you trade futures, there will always be an Index Price. It represents the ‘fair’ spot price of the asset. Futures contracts always settle to a spot index price, and the funding rate is calculated using the index price. - Generally speaking, the mark price is the mid-price of the contract. The only difference is the Mark Price has a collar on it to keep it from diverging too far from the spot index price. The Mark Price is the price to pay attention to for leverage, liquidation, and PnL calculations.