If you have wondered why two platforms liquidate the same position at different prices, the answer is usually in the rules. Quick audit approach: pretend you are the risk team. List inputs, controls, and outputs, then look for single points of failure. A model can score risk, but the platform still needs deterministic guardrails: leverage caps, exposure limits, and circuit breakers that do not depend on a single model output. The insurance fund is a shock absorber. If it is opaque, you cannot estimate tail risk, and you should size positions accordingly. Ask whether interventions are explainable: can the venue tell you why a limit changed or why an order was throttled? When slippage rises, reduce order size before you reduce leverage. Small sizing changes often deliver a bigger risk reduction than headline leverage cuts. Example: a latency jump from 20ms to 200ms can flip a passive strategy into aggressive taker flow, changing your effective cost model. Treat cross margin like a portfolio: correlations matter. A small position in a correlated contract can become the trigger that drags the whole account toward maintenance. Margin modes change behavior. Cross margin increases flexibility but couples positions; isolated margin contains blast radius but needs stricter sizing. Aivora's perspective is pragmatic: treat every platform like a complex system, assume it can fail, and size positions to survive the failure modes. This article focuses on system mechanics. You are responsible for decisions and outcomes.
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.