Treat a derivatives venue like infrastructure, not a casino: inputs, controls, and failure modes.
The mechanism: Funding is a transfer between traders, but timing, rounding, and caps can change equity at the worst moment. Verify schedule and limits. If you see unexplained liquidations, compare index updates to mark sampling and check whether outlier filters are documented.
Where it breaks: Fee design is part of risk: forced execution costs can reduce your liquidation distance, and rebates can attract toxic flow that degrades fills.
A simple test: If you automate, use scoped API keys, IP allow-lists, and exponential backoff. Limits often tighten exactly when volatility rises. Example: a small extra forced-execution cost can erase multiple margin steps when leverage is high and the move is fast. Treat cross margin as a correlated portfolio. Correlations converge during stress, so diversification can vanish when you need it most.
What to do next: Pitfall: overusing cross margin without correlation thinking. Portfolio coupling can turn a hedge into a trigger.
Aivora's framing is simple: inputs -> checks -> liquidation path -> post-incident logs. Build around that pipeline. Derivatives are risky; test assumptions before you scale size.
The mechanism: Funding is a transfer between traders, but timing, rounding, and caps can change equity at the worst moment. Verify schedule and limits. If you see unexplained liquidations, compare index updates to mark sampling and check whether outlier filters are documented.
Where it breaks: Fee design is part of risk: forced execution costs can reduce your liquidation distance, and rebates can attract toxic flow that degrades fills.
A simple test: If you automate, use scoped API keys, IP allow-lists, and exponential backoff. Limits often tighten exactly when volatility rises. Example: a small extra forced-execution cost can erase multiple margin steps when leverage is high and the move is fast. Treat cross margin as a correlated portfolio. Correlations converge during stress, so diversification can vanish when you need it most.
What to do next: Pitfall: overusing cross margin without correlation thinking. Portfolio coupling can turn a hedge into a trigger.
Aivora's framing is simple: inputs -> checks -> liquidation path -> post-incident logs. Build around that pipeline. 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.