In order to improve the stability of the market of contract products and reduce the possibility of unnecessary forced liquidation under the situation of abnormal market fluctuations, Hotbit adopts the mechanism of mark price to calculate users’ unsettled gains and losses.
- The Algorithm of Mark Price
Mark Price=The price of spot trading index+The Mean Value of Moving Basis
The Mean Value of Moving Basis=Moving Average（The standard price of the contract - The contract’s spot trading price）=Moving Average（（Sell one price of the contract + Buy one price of the contract）／2 - The price of spot trading index）
The mark price has taken both the price of spot trading index and the mean value of moving basis into consideration. The mechanism of the mean value of moving basis filters the sudden fluctuations of contract prices within very short periods of time smoothly and thus reduces the possibility of unnecessary forced liquidation under the situations of abnormal fluctuations.
- The Application of Mark Price
- The Calculation of Unsettled Gains:
Long Positions: Unsettled Gains and Losses = The face value of relevant positions * The number of contracts / The average price of relevant positions upon opening of the positions - The face value of relevant positions * The number of contracts / The latest mark price
Short Positions: Unsettled Gains and Losses = The face value of relevant positions * The number of contracts / The latest mark price - The face value of relevant positions * The number of contracts / The average price of relevant positions upon opening of the positions.
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