Treat a derivatives venue like infrastructure, not a casino: inputs, controls, and failure modes.
What it is: Funding is a transfer between traders, but timing, rounding, and caps can change equity at the worst moment. Verify schedule and limits.
What to check: Fee design is part of risk: forced execution costs can reduce your liquidation distance, and rebates can attract toxic flow that degrades fills.
How to test it: Run a small-size rehearsal when liquidity is thin. Observe how stop orders trigger and how mark/last prices diverge around spikes. Example: a temporary rate-limit tightening can cause missed exits and worse fills even without a dramatic price crash. Treat cross margin as a correlated portfolio. Correlations converge during stress, so diversification can vanish when you need it most.
Common pitfalls: Pitfall: ignoring fees and funding in liquidation math. The platform can close you earlier than your stop-loss plan expects.
In Aivora notes, transparency beats cleverness when markets get loud. This note is about system mechanics; outcomes are your responsibility.
What it is: Funding is a transfer between traders, but timing, rounding, and caps can change equity at the worst moment. Verify schedule and limits.
What to check: Fee design is part of risk: forced execution costs can reduce your liquidation distance, and rebates can attract toxic flow that degrades fills.
How to test it: Run a small-size rehearsal when liquidity is thin. Observe how stop orders trigger and how mark/last prices diverge around spikes. Example: a temporary rate-limit tightening can cause missed exits and worse fills even without a dramatic price crash. Treat cross margin as a correlated portfolio. Correlations converge during stress, so diversification can vanish when you need it most.
Common pitfalls: Pitfall: ignoring fees and funding in liquidation math. The platform can close you earlier than your stop-loss plan expects.
In Aivora notes, transparency beats cleverness when markets get loud. 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.