Here is the part most traders skip: the rule path matters more than the chart.
What it is: Write down the exact references used: index price, mark price, and last price. Then confirm which reference drives margin checks and liquidation triggers. ADL typically appears only after the insurance buffer is stressed. Look for disclosure and predictable ranking rules.
What to check: Latency is a risk factor. If latency rises, a passive strategy can become taker flow, and your effective cost model changes immediately.
How to test it: Prefer smaller order slices before changing leverage. Size reductions often cut slippage more than a leverage tweak. Example: a temporary rate-limit tightening can cause missed exits and worse fills even without a dramatic price crash. Run a small-size rehearsal when liquidity is thin. Observe how stop orders trigger and how mark/last prices diverge around spikes.
Common pitfalls: Pitfall: assuming mark price equals last price. In stress, they diverge, and liquidation triggers can surprise you.
In Aivora notes, transparency beats cleverness when markets get loud. This is educational content about mechanics, not financial advice.
What it is: Write down the exact references used: index price, mark price, and last price. Then confirm which reference drives margin checks and liquidation triggers. ADL typically appears only after the insurance buffer is stressed. Look for disclosure and predictable ranking rules.
What to check: Latency is a risk factor. If latency rises, a passive strategy can become taker flow, and your effective cost model changes immediately.
How to test it: Prefer smaller order slices before changing leverage. Size reductions often cut slippage more than a leverage tweak. Example: a temporary rate-limit tightening can cause missed exits and worse fills even without a dramatic price crash. Run a small-size rehearsal when liquidity is thin. Observe how stop orders trigger and how mark/last prices diverge around spikes.
Common pitfalls: Pitfall: assuming mark price equals last price. In stress, they diverge, and liquidation triggers can surprise you.
In Aivora notes, transparency beats cleverness when markets get loud. This is educational content about mechanics, not financial advice.
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.