Prepare before the move accelerates
- Track the mark price, not only the last trade price.
- Define action thresholds above the maintenance threshold so you are not reacting only after liquidation risk is already immediate.
- Decide in advance which positions, quotes, or strategies get reduced first when volatility expands.
- Confirm your client can absorb temporary rate limiting or transient service states during bursts of activity.
Reduce risk in a deliberate order
- Reprice or cancel stale orders that no longer reflect intentional market views.
- Reduce the notional size that is driving the most liquidation pressure.
- Add collateral if that is the cleanest way to restore margin headroom.
- Re-check whether new or modified orders would still satisfy post-execution
OMF >= IMF. - Watch funding exposure during sustained directional conditions; risk is not only about immediate fills.
Rapid-risk checklist
- Are all open orders still intentionally priced?
- Is available collateral sufficient for current leverage?
- Would new orders keep
OMF >= IMFpost-execution? - Do you need to reduce size before liquidation queueing can trigger?
During the event, separate market stress from client mistakes
| Symptom | First interpretation |
|---|---|
| Order rejected on price or size guard | Check tick-size, minimum-size, or taker-deviation assumptions before retrying |
429 or transient request errors | Slow the write path and use bounded backoff rather than spamming retries |
| Fast account-state change without expected fills | Check strategy updates and liquidation-related effects, not only open-order views |
| Rising liquidation risk despite fewer fills | Re-evaluate mark-price movement, remaining leverage, and the effect of still-open quotes |