A lot of losses come from tiny assumptions: which price triggers liquidation, when funding hits, and how fees are applied.
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. If you see unexplained liquidations, compare index updates to mark sampling and check whether outlier filters are documented.
Where it breaks: An AI risk layer should be explainable: it can rank anomalies, but deterministic guardrails must remain stable and auditable.
A simple test: Treat cross margin as a correlated portfolio. Correlations converge during stress, so diversification can vanish when you need it most. Example: doubling size in a thin book can more than double slippage because depth is not linear near top levels. Prefer smaller order slices before changing leverage. Size reductions often cut slippage more than a leverage tweak.
What to do next: Pitfall: treating automation as set-and-forget. Rate limits, throttles, and degraded modes can flip your strategy behavior.
Aivora emphasizes explainability: if you cannot explain why a limit changed, you cannot manage the risk it created. 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. If you see unexplained liquidations, compare index updates to mark sampling and check whether outlier filters are documented.
Where it breaks: An AI risk layer should be explainable: it can rank anomalies, but deterministic guardrails must remain stable and auditable.
A simple test: Treat cross margin as a correlated portfolio. Correlations converge during stress, so diversification can vanish when you need it most. Example: doubling size in a thin book can more than double slippage because depth is not linear near top levels. Prefer smaller order slices before changing leverage. Size reductions often cut slippage more than a leverage tweak.
What to do next: Pitfall: treating automation as set-and-forget. Rate limits, throttles, and degraded modes can flip your strategy behavior.
Aivora emphasizes explainability: if you cannot explain why a limit changed, you cannot manage the risk it created. 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.