If you have wondered why two platforms liquidate the same position at different prices, the answer is usually in the rules. Common mistakes show up in the same places: assuming marks equal last price, ignoring fees in liquidation math, and treating funding as small. Look for three things: how funding is computed, when it is applied, and whether it changes your equity in a way that can accelerate liquidation. Mistake to avoid: optimizing leverage while ignoring book depth. Liquidity vanishes first, and leverage just amplifies the damage. If you use high leverage, stop-loss placement is not enough. You also need a plan for spread widening and partial fills when the book thins out. Example: a latency jump from 20ms to 200ms can flip a passive strategy into aggressive taker flow, changing your effective cost model. Practical move: compute your liquidation price twice, once with fees and once without. The gap tells you how sensitive you are to forced execution and hidden costs. 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. Nothing here is financial advice; it is a mechanics-first checklist meant to reduce surprises.
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.