Direct answer
Exchanges trigger liquidation on the mark price, not the last trade on the chart. Take a 10x long with a simplified liquidation price of 45,248.87 USDT: a wick in the last price to 45,100 with the mark still at 45,600 does not liquidate it, while a last price still at 45,600 with the mark already down at 45,200 means the position is gone. Judge the distance to liquidation on the mark price.
What the two prices are
The last price is where this contract most recently traded, and one large order can move it in an instant. The mark price is built on an index of several spot markets and then smooths the gap between contract and index, so it moves more steadily.
Exchanges use the mark price for unrealised P&L and liquidation precisely so that a momentary anomaly on one market cannot liquidate positions by itself.
Last price below liquidation, position intact
Take a 10× long entered at 50,000 USDT with 0.2 BTC; the simplified liquidation price is about 45,248.87 USDT. If the last price wicks to 45,100 while the mark price stays at 45,600, the position survives — the decision is made on 45,600.
Traders often feel they dodged something at moments like this. In fact the mark price simply did not follow the wick, and the next time the spot index falls with it, that buffer will not be there.
The four cases side by side
Same 10× long, same simplified liquidation price of 45,248.87 USDT. Only the mark-price column decides liquidation; the last-price column is the distance you believe in while watching the candlestick.
The third row is a wick: the last price is already below liquidation and the position survives. The fourth is the opposite — the chart shows 0.77% of room and the position is already gone.
| Mark price | Last price | Distance on mark | Distance on last | Liquidated |
|---|---|---|---|---|
| 46,500 | 46,300 | 2.69% | 2.27% | No |
| 46,500 | 46,700 | 2.69% | 3.11% | No |
| 45,600 | 45,100 | 0.77% | −0.33% | No |
| 45,200 | 45,600 | −0.11% | 0.77% | Yes |
Premium and discount set the direction of the error
When the contract trades above the index — a premium — the mark price sits below the last price, and a long is closer to liquidation than the chart shows. At a discount the mark price sits above the last price, and it is the short whose buffer is overstated.
So the same chart misleads longs and shorts in opposite directions. Going long into a widening premium, or short into a widening discount, is exactly when the distance should be measured again on the mark price.
- At a premium: mark < last, so a long's real buffer is smaller than the chart suggests.
- At a discount: mark > last, so a short's real buffer is smaller than the chart suggests.
- A wick that appears only in the last price, without the index following, is stopped by the mark price.
Last price looks safe, position already gone
The reverse happens too. The last price still reads 45,600, apparently 0.77% above liquidation, while the mark price has fallen to 45,200 — below the liquidation price — and the position is already closed.
When the contract trades at a premium to the index, the mark price sits below the last price. Judging the distance to liquidation from the candlestick in that market overstates the buffer.
Where to look in practice
To judge how close liquidation is, switch the chart to mark price, or read the mark price and estimated liquidation price on the position page directly.
When setting a stop, order panels usually let you choose whether it triggers on the last price or the mark price, and each has trade-offs. Either way the stop should sit well before the liquidation level; check the options your exchange actually offers.
Official sources and calculation boundary
That liquidation is judged on the mark price follows OKX's documentation of liquidation price and trigger conditions; that tiers move the liquidation level with position size comes from Binance's leverage-bracket documentation. The four mark and last price pairs are constructed to illustrate the two errors, not quotes from any moment.
- OKX: futures liquidation price and conditions
- Binance Developers: USDⓈ-M notional and leverage brackets
Next checks in this series
Frequently asked questions
Why does the mark price differ from the last price?
The mark price rests on an index of several spot markets and smooths the basis; the last price reflects only this contract's latest trade. Whenever the contract trades at a premium or discount to the index, the two separate.
If a wick did not liquidate me, is the exchange protecting me?
It protects against liquidation by a momentary anomaly on one market, not against a wrong directional view. If the index itself keeps falling, the mark price reaches the liquidation level all the same.
Do all exchanges calculate the mark price the same way?
The principle is similar — an index of several spot markets with the basis smoothed — but index components, weights and smoothing differ between exchanges. Which one applies to your position is set out in that exchange's contract rules.
Should a stop trigger on the last price or the mark price?
A mark-price trigger is less likely to fire on a wick, though the fill still happens at market prices; a last-price trigger reacts faster and is easier to sweep. Both belong well before the liquidation level, and the choice depends on whether you fear being shaken out or slipping past the stop more.