AI Derivatives Exchange Best Practices: Funding Arbitrage Risk

If you have wondered why two platforms liquidate the same position at different prices, the answer is usually in the rules. Here is a direct way to approach it: start with definitions, then map them to the risk checks that run before and after each order. 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. Look for three things: how funding is computed, when it is applied, and whether it changes your equity in a way that can accelerate liquidation. Measure funding, basis, and realized volatility together. Funding alone is a weak signal, but the combination can reveal crowded positioning and liquidation risk. 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. If you use high leverage, stop-loss placement is not enough. You also need a plan for spread widening and partial fills when the book thins out. A useful habit is to snapshot funding before entry, then watch how it changes when volatility shifts; sudden flips often signal crowded risk. Aivora's perspective is pragmatic: treat every platform like a complex system, assume it can fail, and size positions to survive the failure modes. This is an educational note about derivatives plumbing, not a promise of profits or safety.