Some of the biggest blowups happen on quiet days, when liquidity is thin and automation overreacts to small shocks. Mini case study: a sudden spread widening triggers more taker flow, which increases fees and pushes equity below maintenance sooner than expected. 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. Example: a 25x position with a 0.06% taker fee can lose more than a full maintenance step from fees alone if forced to close during a fast move. The fix is rarely more leverage. It is usually tighter sizing, clearer triggers, and a platform that documents its forced execution path. When slippage rises, reduce order size before you reduce leverage. Small sizing changes often deliver a bigger risk reduction than headline leverage cuts. Liquidation is not a single event; it is a path. Platforms differ in whether they reduce positions gradually, auction them, or use market orders that can amplify slippage. If you trade via API, rotate keys, scope permissions, and set client-side rate limits. Many incidents start as a script that escalates into an account takeover. 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.