The reference price a venue uses to value open positions and trigger liquidations, smoothed from an external index rather than taken from its own last trade.
Using the venue's own last-traded-price would let anyone with enough size wick the book and liquidate other traders. Mark price instead blends an index-price from several spot venues with a fair-basis adjustment, so it tracks the wider market.
This is why your position's unrealised profit and loss, and your liquidation level, are computed against a number that can differ from the price printing on the chart in front of you. During a violent move the gap is widest and matters most.
Check the formula on any venue you use, because they differ. Some mark perpetuals against index plus a moving-average basis, others against the mid of the venue's own book bounded by the index. The difference decides whether a 5% wick liquidates you.
Original diagrams for the ideas on this page. Illustrative, not real market data.
The parts of a candlestick. One candle sums up a slice of time: the thick real body runs from the opening price to the closing price, and the thin wicks reach out to the highest and lowest prices traded. Colour tells you which way the body ran.
Educational only, not advice. Spotted an error? Post in Site Feedback.