{"slug":"index-price","term":"Index Price","category":"Derivatives","definition":"Index price is the volume-weighted average of an asset's spot price across several major exchanges, serving as the neutral reference for a derivatives contract. Exchanges build mark price and funding calculations on top of it, so no single venue's order book — thin, manipulated, or briefly broken — defines what the asset is worth.","street":"The \"what's it really trading at\" price — an average across the big exchanges so one dodgy order book can't lie to your contract.","depth":["The index is a basket: an exchange might build its BTC index from spot prices on five to eight major venues, volume-weighted, with outlier protection that drops or clamps a feed when it strays too far from the median. This is the ground truth your perp is tethered to — funding pushes the perp toward the index, and mark price is built on top of it. Every exchange publishes its constituent list in the docs, and it's worth reading for anything thin.","Where it bites: on small alts the \"index\" can lean on two or three shallow books, and someone pushing spot on one of them can drag the index — and every liquidation calculated on it — along for the ride. That's a known playbook in illiquid perps during low-liquidity hours. If you trade levered alts, check what the index is made of; an alt whose index rests on one exchange's book is an alt where your liquidation can become someone's project for the night."],"live":{"label":"Scan the spot markets","href":"/markets/crypto"},"related":["mark-price","basis","perpetual-futures"]}