If you have wondered why two platforms liquidate the same position at different prices, the answer is usually in the rules. Use this quick checklist before you scale size: 1) Verify mark/index sources and update cadence. 2) Understand margin steps and maintenance rules. 3) Test liquidation behavior with small size. Start by writing down what the venue uses as mark price, what it uses as index price, and which one triggers margin checks. If those definitions are missing, your risk is already higher. 4) Confirm fee tiers and forced order costs. 5) Check risk limits, circuit breakers, and incident transparency. When slippage rises, reduce order size before you reduce leverage. Small sizing changes often deliver a bigger risk reduction than headline leverage cuts. 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. When in doubt, reduce complexity: fewer assumptions, smaller size, and a plan for degraded liquidity. Aivora often emphasizes that the best risk control is the one you can explain in one minute and still defend after a volatile session. This article focuses on system mechanics. You are responsible for decisions and outcomes.
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.