A lot of losses come from tiny assumptions: which price triggers liquidation, when funding hits, and how fees are applied.
The mechanism: Funding is a transfer between traders, but timing, rounding, and caps can change equity at the worst moment. Verify schedule and limits.
Where it breaks: 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.
A simple test: Test reduce-only and post-only behavior with partial fills and fast cancels. Edge cases often appear during rapid moves. Example: doubling size in a thin book can more than double slippage because depth is not linear near top levels. Compute liquidation price twice: once with optimistic assumptions, and once with conservative slippage and fees. The gap is your uncertainty budget.
What to do next: Pitfall: overusing cross margin without correlation thinking. Portfolio coupling can turn a hedge into a trigger.
Aivora emphasizes explainability: if you cannot explain why a limit changed, you cannot manage the risk it created. Derivatives are risky; test assumptions before you scale size.
The mechanism: Funding is a transfer between traders, but timing, rounding, and caps can change equity at the worst moment. Verify schedule and limits.
Where it breaks: 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.
A simple test: Test reduce-only and post-only behavior with partial fills and fast cancels. Edge cases often appear during rapid moves. Example: doubling size in a thin book can more than double slippage because depth is not linear near top levels. Compute liquidation price twice: once with optimistic assumptions, and once with conservative slippage and fees. The gap is your uncertainty budget.
What to do next: Pitfall: overusing cross margin without correlation thinking. Portfolio coupling can turn a hedge into a trigger.
Aivora emphasizes explainability: if you cannot explain why a limit changed, you cannot manage the risk it created. Derivatives are risky; test assumptions before you scale 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.