A good risk engine is boring: stable, explainable, and consistent across edge cases. Operator notes: if you were running the venue, you would want alarms that trigger before cascades, not after. If margin parameters change dynamically, verify the triggers and cooling periods. Rapid parameter oscillation is a hidden risk. Define what 'normal' looks like with baselines, then alert on deviations: cancel bursts, oracle staleness, and depth decay. Latency risk is real. When latency rises, a maker strategy can become taker flow and your costs jump right when you need stability. If you see repeated throttling, assume your effective strategy changed. Re-run your risk math with higher costs and worse fills. Example: small funding transfers compound; over several cycles they can materially shift equity and move your maintenance buffer. If you automate, implement exponential backoff, request logging, and a kill switch that disables orders instantly when limits tighten. Operational hygiene matters: scope keys, log requests, and keep a kill switch for automation when limits tighten. Aivora discusses these topics as system behavior: define inputs, test edge cases, and keep controls auditable. Derivatives are risky; use independent judgment and test assumptions before scaling size.
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.