Index price
Index price is a weighted average spot price of an asset across several major exchanges. Futures use it as a reference for funding, mark price and settlement at expiry.
How it works
The exchange takes spot prices, for example BTC/USDT or BTC/USD, from several venues and averages them with weights (often by volume). Venues with clearly abnormal prices are dropped or down-weighted, so a single exchange cannot move the index.
The index is the true price of the asset as far as derivatives are concerned. Funding depends on the gap between the perp and the index, the mark price is built on the index, and quarterly futures and options settle at expiry on an average of the index over a set window.
The index composition is usually published on the contract page. If an exchange in the index goes down or its price breaks away, the operator may change the composition under its rules.
BTC prices: exchange A $60,000 (50% weight), exchange B $60,100 (30%), exchange C $59,900 (20%). Index = 0.5 × 60,000 + 0.3 × 60,100 + 0.2 × 59,900 = $60,010. If the perp trades at $60,200, it is above the index, and funding is likely to be positive.
The mistake is confusing the index price with the price on one particular exchange and treating the difference as an error. The index is a market average and is meant to differ slightly. For liquidation, watch the mark price; to judge whether a perp is stretched, compare it with the index.
Questions and answers
What is index price in simple terms?
It is the average price of an asset across several major spot exchanges, used as the fair price for futures.
What is the difference between index price and mark price?
The index is an average of spot prices. The mark price builds on the index and adds a smoothed gap between the future and spot.
Where can I see what is in the index?
Usually on the contract information page of the exchange, which lists the source venues and their weights.
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Updated: 2026-10-19