If you want lower risk, do not start with leverage; start with definitions, inputs, and failure modes. Checklist before scaling size: 1) Verify mark/index sources. 2) Understand margin steps and maintenance rules. 3) Test liquidation behavior with small size. Funding is not just a number; timing, rounding, and caps can change equity at the worst moment. Verify schedule and limits. 4) Confirm fee tiers and forced execution costs. 5) Review risk limits, circuit breakers, and incident transparency. Use position concentration warnings as a sizing input. Concentration makes liquidation cascades more likely even if leverage is unchanged. Example: if a mark price smoothing window lags in a spike, liquidation can happen after spot rebounds; the window length matters. Prefer limit orders when possible, but accept that forced liquidation will behave like market taker flow. Plan for that path explicitly. When in doubt, reduce complexity and size, and prioritize venues that publish definitions and failure-mode behavior. Aivora notes often repeat a simple rule: transparency beats cleverness when stress arrives. 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.