What is Auto-Deleverage (ADL)？
When the trader's position triggered forced liquidation, these position will be taken over by the CoinEx liquidation system. If the position is closed at a price lower than the bankruptcy price, the insurance fund will be systematically used to make up for the losses caused by the liquidation.
If the insurance fund cannot fully cover the loss of any forced liquidation order, or the liquidity of the current futures market is insufficient to fill the liquidated order, ADL, or Auto-Deleverage will be systematically triggered.
Once ADL is activated, traders who hold directional the position of that direction will be auto-deleveraged by profit and leverage, based on the Mark Price at the trigger time of the ADL.
ADL Priority
The priority for ADL is calculated by profit and leverage, and traders with more profit and higher leverage will be deleveraged first. Meanwhile, all long and short positions will be systematically sorted from high to low as follows:
Priority = Profit% * Actual Leverage
in:
Actual leverage = Cumulative Open value / Margin
(Long Position) Profit% = Mark Value / Cumulative Open Value
(Short Position) Profit% = Cumulative Open Value / Mark Value
Mark Value = Position Quantity * Mark Price
Note: Long and short positions are sorted separately
ADL Indicator
You can use the ADL indicator to know your priority order in the ADL queue. The indicator light is divided into 5 gears, and each lightened gear means your priority in queue is raised 20%. The brighter the indicator, the higher the priority, and the more likely your positions will be automatically reduced soon.
As shown in the above image, it means that the priority of the current position is in the top 40% of the ADL queue. Therefore, when the liquidation occurs, if the insurance fund cannot fully cover the loss of any forced liquidation order or the liquidity of the current futures market is insufficient to fill the liquidated order, your position may be automatically reduced. In this case, you will receive a notification and your unfilled orders will be canceled.
According to your rank in the ADL queue, you can reduce the risk by reducing the leverage or closing partial PNL.