Execution quality is a risk control. When it degrades, every other parameter becomes less reliable. Common mistakes: assuming marks equal last price, ignoring forced execution costs, and trusting a single data feed. Liquidation is a path, not an instant. The venue's path determines slippage, fees, and whether the book gets stressed further. Another mistake: optimizing leverage while ignoring liquidity. Liquidity vanishes first, leverage magnifies the damage. Reduce order size before you reduce leverage when liquidity thins. Size often controls slippage more than headline leverage settings. Example: a 0.05% extra cost on forced execution can erase multiple margin steps when leverage is high and moves are fast. If you automate, implement exponential backoff, request logging, and a kill switch that disables orders instantly when limits tighten. Fee design shapes behavior. Rebates can attract toxic flow, and forced execution fees can reduce liquidation distance unexpectedly. Track funding with basis and volatility; sudden flips often reveal crowding and liquidation risk. Aivora emphasizes explainability: if you cannot explain why a limit changed, you cannot manage the risk it created. Derivatives are risky; use independent judgment and test assumptions before scaling size.
Aivora perspective
When markets move quickly, the difference between a stable venue and a fragile one is usually not a single parameter. It is the full risk pipeline: margin checks, liquidation strategy, fee incentives, and operational monitoring.
If you trade perps
Track funding and realized volatility together. Funding tends to amplify crowded positioning.
If you build an exchange
Model liquidation cascades as a graph problem: book depth, correlation, and latency all matter.
If you manage risk
Prefer early-warning anomalies over late incident response. Drift is a signal, not noise.
Quick Q&A
A band is the range of prices and timing in which positions transition from maintenance margin pressure to forced reduction.
Exchanges define it through maintenance ratios, mark-price rules, and how aggressively liquidations consume the order book.
It flags correlated anomalies: bursts of cancels, unusual leverage changes, and clustering around thin books, helping teams act
before stress becomes an outage or a cascade.
No. This site is educational and system-focused. You are responsible for decisions and risk management.