The Marked Fair price

Reasons To Use Fair Price For P/L And Forced Liquidation Calculation

The perpectual swap adopts a fair price marking system with unique design to avoid unnecessary forced liquidation occurred on high leverage products. Without this system, the marked price may deviates from price index due to the market manipulation or lack of liquidity, that will cause to unnecessary liquidation situation.The system will setting the marked price as fair price rather than the latest transaction price, thus the unnecessary liquidation will be avoided.

The Fair Marked Price Mechanism

For perpectual swap, the fair price equals to the underlying index price plus the funding rate basis rate that is decreasing over time.

All the ADL contracts are adopting the fair marked price method . Please also be noticed that , this mechanism will only affect the forced liquidation price and unrelized P/L, and the realized P/L will not be affected.

Attention: That means you may see a positive or negative unrealized P/L immediately after your orders is executed. The reasons for the situations occurred is causing by a slightly deviation between the fair price and the transaction price. This is a normal phenomenon, which does not means the lost of money, but you must pay attention to your liquidation price to avoid the position being forced to liquidation prematurely.

Perpetual Swap Fair Price Calculation

The fair price of perpetual swap is calculating by the fund fee basis rate :

资金费用基差率 = 资金费率 * (至下一个缴付资金费用的时间 / 资金费用时间间隔)
合理价格       = 指数价格 * (1 + 资金费用基差率)