Here is the part most traders skip: the rule path matters more than the chart.
The mechanism: Fee design is part of risk: forced execution costs can reduce your liquidation distance, and rebates can attract toxic flow that degrades fills.
Where it breaks: Write down the exact references used: index price, mark price, and last price. Then confirm which reference drives margin checks and liquidation triggers.
A simple test: Prefer smaller order slices before changing leverage. Size reductions often cut slippage more than a leverage tweak. Example: small funding transfers compound; over several cycles they can materially shift equity and your maintenance buffer. Compute liquidation price twice: once with optimistic assumptions, and once with conservative slippage and fees. The gap is your uncertainty budget.
What to do next: 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. Derivatives are risky; test assumptions before you scale size.
The mechanism: Fee design is part of risk: forced execution costs can reduce your liquidation distance, and rebates can attract toxic flow that degrades fills.
Where it breaks: Write down the exact references used: index price, mark price, and last price. Then confirm which reference drives margin checks and liquidation triggers.
A simple test: Prefer smaller order slices before changing leverage. Size reductions often cut slippage more than a leverage tweak. Example: small funding transfers compound; over several cycles they can materially shift equity and your maintenance buffer. Compute liquidation price twice: once with optimistic assumptions, and once with conservative slippage and fees. The gap is your uncertainty budget.
What to do next: 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. Derivatives are risky; test assumptions before you scale 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.