Question: Mark Price vs Last Price

T

TradeSparrow

Imgur Image containing screenshot of question.

The "Current Market Value" price is often different from the "Last" price. What's the difference in meaning between the two values? I did a couple searches on Google, in ThinkorSwim's documentation, and on Investopedia, but found nothing that answered the question.

Investopedia compares market value to "book value", which I don't think is the same issue.

In the ToS documentation, I found:
The MARK for a stock is generally the last trade price. The MARK for an option is always the mid point between its bid and ask prices.
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However, in my experience, the Mark is generally not the Last price. In fact, the Mark price is generally a few cents from the Last price. As we speak, 9/13 at 1 PM EST, the Mark price is 794.25 and the Last price is 796.00.

ToS talks about the Mark price being the average of the bid and ask prices when dealing with Options. Even though I am not trading Options, I checked the Bid/Ask prices and the Mark price is not the average of the two.

Is it possible that it is the average of ALL the Bid/Ask prices, as seen in the Level II figures? As they constantly change, I took a screenshot and averaged the prices based on number of contracts and also without respect to the number of contracts. The Market Price is definitely not the average of the Bids/Asks, at least not for futures.

What do you guys think?
 
Hello Sir.

I hope and i wish to be well.

I have to say that i have many Wonders after your Comments,

so i decide to contact with a Responsible Person for to ask him about.

That Person is Mr Scott Sheridan Co-Founder of Thinkorswim Brokerage Firm.

So, i send him an E-Mail a little time ago.

Here it is the E-Mail that i send it:

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Dear Sir,

Hello Again.

I hope and i wish to be well.

Exist something that i want to tell you this hour.

A Person in the Elite Trade Internet Site have create a Topic,

which is here: http://www.elitetrader.com/vb/showthread.php?s=&threadid=227050 .

Can you make me please,

some Comments relative to it for to put it there ?

Respectfully Yours,

George Kanellopoulos.

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Here is the E-Mail Answer that i receive from Mr Scott Sheridan:

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George:

The answer is that for options we do use the middle of the bid/ask spread for the current mark price but for cash settled indices (which I think they are describing below) we go off of the last due to the fact that the underlying is not actually tradable. It is possible that somebody is looking at the closing price for a stock which can also be referred to as the mark but in the afterhours the price may be higher or lower so that would create a difference.

I hope this helps…

Scott

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Kind Regards,

George Kanellopoulos.
 
Ummm....

Outside of the TOS universe, for us old hands the "Mark" is where you settle the instrument, can frequently be where the exchange settles it, and the "Last price" is indeed that - the last traded price printed. Neither one of those terms necessarily is correlated to the bid/ask spread unless one of them trades and creates a "last price" print.
 
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