Why is Fair Price Used for Calculating PNL and Liquidation Price?

To enhance the stability of the futures market and reduce unnecessary forced liquidations during abnormal market fluctuations, MEXC uses a uniquely designed fair price marking system for perpetual futures. Without this system, market manipulation or lack of liquidity could lead to deviations between the intraday price and the price index, resulting in unnecessary forced liquidations.

Fair Price Marking Mechanism

Please note that this price only affects the liquidation price and unrealized PNL. It does not have an impact on realized PNL.

Note: This means that after your order is filled, you may immediately see positive or negative unrealized PNL. This occurence is due to the slight deviations between the fair price and the filled price. It is a normal occurrence and does not imply that you have lost funds. However, it is essential to monitor your liquidation price to prevent premature forced liquidation.

The calculation method for the fair price of perpetual futures is as follows:

Fair Price Calculation Formula = Median (Funding Rate Premium, Fair Mid-price of Basis, Last Price)

Funding Rate Premium = Index Price * (1 + LatestFunding Rate * (Hours Until Next Funding Rate Settlement / Hours in Funding Rate Settlement Cycle))

Fair Mid-price of Basis =Index Price + Moving Average of Basis (Specified Cycle)

Moving Average of Basis (Specified Cycle) = MA ((Best Bid Price + Best Ask Price) / 2 - Index Price)

Last price refers to the latest traded price of the futures pair, updated in real-time.