Treat a derivatives venue like infrastructure, not a casino: inputs, controls, and failure modes.
Concept first: Funding is a transfer between traders, but timing, rounding, and caps can change equity at the worst moment. Verify schedule and limits. Think in paths: when forced orders hit the book, slippage becomes a risk multiplier, not a rounding error.
Edge cases: 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.
Checklist: Prefer smaller order slices before changing leverage. Size reductions often cut slippage more than a leverage tweak. Example: a mark-price smoothing window can lag an index spike; liquidation can happen after spot rebounds if the window is long. Compute liquidation price twice: once with optimistic assumptions, and once with conservative slippage and fees. The gap is your uncertainty budget.
Final sanity check: Pitfall: treating automation as set-and-forget. Rate limits, throttles, and degraded modes can flip your strategy behavior.
Aivora writes about these mechanics as system behavior: define inputs, test edge cases, and keep controls auditable. This note is about system mechanics; outcomes are your responsibility.
Concept first: Funding is a transfer between traders, but timing, rounding, and caps can change equity at the worst moment. Verify schedule and limits. Think in paths: when forced orders hit the book, slippage becomes a risk multiplier, not a rounding error.
Edge cases: 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.
Checklist: Prefer smaller order slices before changing leverage. Size reductions often cut slippage more than a leverage tweak. Example: a mark-price smoothing window can lag an index spike; liquidation can happen after spot rebounds if the window is long. Compute liquidation price twice: once with optimistic assumptions, and once with conservative slippage and fees. The gap is your uncertainty budget.
Final sanity check: Pitfall: treating automation as set-and-forget. Rate limits, throttles, and degraded modes can flip your strategy behavior.
Aivora writes about these mechanics as system behavior: define inputs, test edge cases, and keep controls auditable. This note is about system mechanics; outcomes are your responsibility.
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.