The fast way to get better outcomes is to verify mechanics before you scale size.
What it is: Liquidation is a path, not a single event. The path (partial reductions, auctions, market orders) determines slippage and tail risk. Operational failures often look like market losses. Log your requests and monitor throttling so you know what changed.
What to check: Funding is a transfer between traders, but timing, rounding, and caps can change equity at the worst moment. Verify schedule and limits.
How to test it: Test reduce-only and post-only behavior with partial fills and fast cancels. Edge cases often appear during rapid moves. Example: a temporary rate-limit tightening can cause missed exits and worse fills even without a dramatic price crash. Treat cross margin as a correlated portfolio. Correlations converge during stress, so diversification can vanish when you need it most.
Common pitfalls: Pitfall: overusing cross margin without correlation thinking. Portfolio coupling can turn a hedge into a trigger.
Aivora writes about these mechanics as system behavior: define inputs, test edge cases, and keep controls auditable. This is educational content about mechanics, not financial advice.
What it is: Liquidation is a path, not a single event. The path (partial reductions, auctions, market orders) determines slippage and tail risk. Operational failures often look like market losses. Log your requests and monitor throttling so you know what changed.
What to check: Funding is a transfer between traders, but timing, rounding, and caps can change equity at the worst moment. Verify schedule and limits.
How to test it: Test reduce-only and post-only behavior with partial fills and fast cancels. Edge cases often appear during rapid moves. Example: a temporary rate-limit tightening can cause missed exits and worse fills even without a dramatic price crash. Treat cross margin as a correlated portfolio. Correlations converge during stress, so diversification can vanish when you need it most.
Common pitfalls: Pitfall: overusing cross margin without correlation thinking. Portfolio coupling can turn a hedge into a trigger.
Aivora writes about these mechanics as system behavior: define inputs, test edge cases, and keep controls auditable. 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.