Are There Mechanisms Other than Liquidation to Protect Traders from Divergence Risk?

While liquidation is the ultimate backstop, some platforms offer partial liquidation, where the system only closes a part of the position to bring the margin level back above the maintenance requirement. Traders can also use risk management tools like stop-loss orders, which automatically close a position at a predetermined price to prevent catastrophic losses before the maintenance margin is even hit.

Additionally, some exchanges are exploring more sophisticated systems, such as tiered margin requirements and socialized loss systems, to reduce the harsh impact of a full liquidation event on individual traders.