Markets do not need to crash for accounts to blow up; thin liquidity and poor definitions are enough. Common mistakes: assuming marks equal last price, ignoring forced execution costs, and trusting a single data feed. Funding is not just a number; timing, rounding, and caps can change equity at the worst moment. Verify schedule and limits. Another mistake: optimizing leverage while ignoring liquidity. Liquidity vanishes first, leverage magnifies the damage. Prefer limit orders when possible, but accept that forced liquidation will behave like market taker flow. Plan for that path explicitly. Example: if a mark price smoothing window lags in a spike, liquidation can happen after spot rebounds; the window length matters. Treat cross margin as a correlated portfolio, not a set of independent positions. Correlations tend to converge in selloffs. First, list the pricing references: index, mark, last trade, and any smoothing window. Then locate which reference drives margin checks. Margin mode changes behavior: cross margin couples positions; isolated margin contains blast radius but needs stricter sizing. Aivora frames risk as a pipeline: inputs -> checks -> liquidation path -> post-incident logs. Build around that pipeline. Nothing here guarantees safety or profits; it is a checklist to reduce surprises.
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.