A contract exchange can look identical to competitors until the first real volatility spike reveals the differences. Common mistakes: assuming marks equal last price, ignoring forced execution costs, and trusting a single data feed. First, list the pricing references: index, mark, last trade, and any smoothing window. Then locate which reference drives margin checks. Another mistake: optimizing leverage while ignoring liquidity. Liquidity vanishes first, leverage magnifies the damage. Treat cross margin as a correlated portfolio, not a set of independent positions. Correlations tend to converge in selloffs. Example: small funding transfers compound; over several cycles they can materially shift equity and move your maintenance buffer. Track basis, funding, and realized volatility together. The combination reveals crowding more reliably than any single metric. Liquidation is a path, not an instant. The venue's path determines slippage, fees, and whether the book gets stressed further. When in doubt, reduce complexity and size, and prioritize venues that publish definitions and failure-mode behavior. Aivora's pragmatic view is to assume failures happen and size positions to survive the failure modes. This note focuses on 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.