Curriculum·R401 Derivatives Foundations·about 33 min
The three prices
By the end of this lesson you can
- →Name the three prices a derivative venue publishes and state what each one controls
- →Explain why liquidation runs off the mark and stop orders may not
- →Compute how an index's construction changes the damage a single venue's wick does
- →Check the four parameters that define a venue's mark before opening a position
Senior · enrolled learners
This lesson opens with The Binance.US flash crash, 21 October 2021.
- What happened
- At 11:34 UTC on 21 October 2021 the BTC to USD spot pair on Binance.US printed a one-minute candle that Cointelegraph reported as running from $65,815 down to $8,200, after which the price bounced back to almost exactly where it had been, a fall of about 87 percent inside a single minute. A Binance.US spokesperson told CoinDesk that one of its institutional traders had indicated a bug in that trader's own algorithm, which appeared to have caused the sell-off. Cointelegraph reported that other major exchanges logged a one-minute floor of around $64,200 over the same interval, meaning the wider market moved about two and a half percent while one venue's tape showed a collapse. Anything computed from that venue's last traded price during those sixty seconds saw a price that had no counterpart anywhere else.
- The decision point
- The lesson's reading: the event separates the two things people mean by the price. One venue's tape is a record of trades that happened there, and it can be moved by a single participant's error. A mark price built from an aggregate of venues is a construction designed to be hard to move. Which of the two a liquidation is computed from is a venue parameter, published in advance, and it decides whether a minute like this one is a curiosity or the end of a position.
What you will be able to answer
- →What are the three prices?
- →Which one liquidates you?
- →What did the index construction save?
- →Which four mark parameters do you check?
Orientation and Year One are open: anyone can read them without an account. From Year Two onward the lessons are for enrolled learners, because progress through the later years only means anything if it is tracked against a record.
It is free. We do not sell the list and there is nothing to buy at the end of it.
Sources and review
- https://www.coindesk.com/markets/2021/10/21/bitcoin-price-flash-crash-on-binanceus-attributed-to-trader-algorithm-bug
- https://cointelegraph.com/markets/bitcoin-price-flash-crashes-by-87-to-8k-on-binance-us
- https://www.forbes.com/sites/billybambrough/2021/10/21/binance-ceo-issues-crypto-price-warning-after-sudden-bitcoin-flash-crash-knocks-ethereum-and-wider-market/
- https://www.coindesk.com/markets/2025/03/26/hyperliquid-delists-jellyjelly-after-vault-squeezed-in-usd13m-tussle
- https://rekt.news/hyperliquidate2
- https://orderly.network/docs/introduction/trade-on-orderly/perpetual-futures/mark-price-index-price-and-last-price
- https://www.coinglass.com/learn/2025-annual-report-en
Confidence high·Volatility medium·Reviewed 2026-10-22·Owner unassigned
Contested
The candle's figures differ by source. Cointelegraph gives a move from $65,815 to $8,200 and a floor of around $64,200 on other major exchanges, and its own lead says $8,100. CoinDesk gives a fall from around $65,760 to as low as $8,200 and says Bitstamp fell about 2.3 percent and never went below $63,600. Forbes describes a drop to $8,200 and a fall of around $1,000 on Coinbase. This lesson's arithmetic uses Cointelegraph's figures; on CoinDesk's the divergence is roughly 38 times, so the argument is unchanged. The cause is Binance.US's account, relayed from the trader, and was not independently established.
The candle printed on a spot pair. The lesson uses it to ask what a position marked off that tape would have seen, which is a question about a venue parameter rather than a claim about liquidations or losses on that day.
The five-venue index in part three is an illustration with stated inputs, not a description of any real index. Production indices use varying venue sets, weights, medians, trimmed means and staleness rules, and several publish their methodology. The point is the size of the gap between two reasonable constructions on identical data.
J302-11 owns the Hyperliquid oracle override as a governance question about who can decide a price. This lesson owns the three prices as venue parameters. Keep the split and route the override argument there.