Markets do not need to crash for accounts to blow up; thin liquidity and poor definitions are enough. Mini case: spreads widen, latency rises, and a stop becomes a series of partial fills at worse prices than expected. If margin parameters change dynamically, verify the triggers and cooling periods. Rapid parameter oscillation is a hidden risk. Compute liquidation price twice: once including fees and conservative slippage, and once with optimistic assumptions. The gap is your uncertainty budget. Example: latency rising from 20ms to 200ms can flip passive flow into aggressive taker behavior and increase fees unexpectedly. The fix is usually not more leverage. It is smaller size, clearer triggers, and verified liquidation paths. Fee design shapes behavior. Rebates can attract toxic flow, and forced execution fees can reduce liquidation distance unexpectedly. Treat cross margin as a correlated portfolio, not a set of independent positions. Correlations tend to converge in selloffs. When in doubt, reduce complexity and size, and prioritize venues that publish definitions and failure-mode behavior. 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 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.