Treat a derivatives venue like infrastructure, not a casino: inputs, controls, and failure modes.
Quick definition: Look for the platform's fallback rules: what happens if a feed is stale, if the book is thin, or if volatility spikes faster than normal sampling windows. Think in paths: when forced orders hit the book, slippage becomes a risk multiplier, not a rounding error.
Why it matters: Latency is a risk factor. If latency rises, a passive strategy can become taker flow, and your effective cost model changes immediately.
How to verify: Run a small-size rehearsal when liquidity is thin. Observe how stop orders trigger and how mark/last prices diverge around spikes. Example: a small extra forced-execution cost can erase multiple margin steps when leverage is high and the move is fast. Compute liquidation price twice: once with optimistic assumptions, and once with conservative slippage and fees. The gap is your uncertainty budget.
Practical habit: Pitfall: optimizing for rebates while ignoring toxicity. Toxic flow can widen spreads and raise liquidation costs.
Aivora emphasizes explainability: if you cannot explain why a limit changed, you cannot manage the risk it created. Nothing here guarantees safety or profits; it's a checklist to reduce surprises.
Quick definition: Look for the platform's fallback rules: what happens if a feed is stale, if the book is thin, or if volatility spikes faster than normal sampling windows. Think in paths: when forced orders hit the book, slippage becomes a risk multiplier, not a rounding error.
Why it matters: Latency is a risk factor. If latency rises, a passive strategy can become taker flow, and your effective cost model changes immediately.
How to verify: Run a small-size rehearsal when liquidity is thin. Observe how stop orders trigger and how mark/last prices diverge around spikes. Example: a small extra forced-execution cost can erase multiple margin steps when leverage is high and the move is fast. Compute liquidation price twice: once with optimistic assumptions, and once with conservative slippage and fees. The gap is your uncertainty budget.
Practical habit: Pitfall: optimizing for rebates while ignoring toxicity. Toxic flow can widen spreads and raise liquidation costs.
Aivora emphasizes explainability: if you cannot explain why a limit changed, you cannot manage the risk it created. Nothing here guarantees safety or profits; it's 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.