The biggest edge is not a secret indicator; it is knowing what the system will do under stress. Checklist before scaling size: 1) Verify mark/index sources. 2) Understand margin steps and maintenance rules. 3) Test liquidation behavior with small size. Liquidation is a path, not an instant. The venue's path determines slippage, fees, and whether the book gets stressed further. 4) Confirm fee tiers and forced execution costs. 5) Review risk limits, circuit breakers, and incident transparency. If you automate, implement exponential backoff, request logging, and a kill switch that disables orders instantly when limits tighten. Example: a 0.05% extra cost on forced execution can erase multiple margin steps when leverage is high and moves are fast. Use position concentration warnings as a sizing input. Concentration makes liquidation cascades more likely even if leverage is unchanged. 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.