Similar to perpetual contracts, index prices for futures contracts are calculated by taking reference to the prices reported by the various major spot exchanges. For a detailed understanding of how Index Price is derived, please refer to the article on Index Price Calculation.

How is index price used in Bybit futures?

1) Index Price x (1 + Basis Rate) = Mark Price, which is the reference price used to trigger liquidations of futures positions. For more information regarding the calculation of Mark Price for futures contracts, please refer to the article here.

2) When traders continue to hold a futures position from 07:30:00 UTC to 08:00:00 UTC (30 mins before settlement time at 08:00:00 UTC), instead of using the Last Traded Price, the unrealized P&L will be estimated based on an average index price.

3) The system will automatically settle all open futures positions on the settlement date. However, instead of using the best bid/ask prices inside the order book, the settlement price will be determined by the estimated settlement price derived by averaging the index price every second from 07:30:00 UTC to 08:00:00 UTC. 

4) Expected settlement price will only be shown between 07:30:00 UTC and 08:00:00 UTC and it indicates an average index price from 07:30:00 UTC up till the moment and is updated per second