What is Auto-Deleveraging (ADL)?
When forced liquidation is triggered, the trader's positions will be taken over by the CoinEx liquidation system. If the position is liquidated at a price worse than the bankruptcy price, the system will use the insurance fund to cover any excess loss incurred from the liquidation.
If the Insurance Fund is insufficient or market liquidity is too low to fully execute liquidated orders, the system will activate the Auto-Deleveraging (ADL).
When ADL is triggered, the system will close winning positions based on the mark price at the trigger time, by profit and leverage priority.
For example, if an investor's long position is liquidated, the system will automatically close the short positions of other investors to offset the losses caused by the liquidated long position.
ADL Priority
1. Purpose
When ADL is triggered, positions will be liquidated based on the marked price at the trigger time, by profit and leverage priority. Positions with higher profits and larger leverage will be prioritized for ADL. Long and short positions are ranked separately in descending order.
2. Calculation
- Priority = Profit Percentage * Effective Leverage
- Effective Leverage = Cumulative Open Value / Margin
- Profit Percentage (Long) = Mark Value / Cumulative Open Value
- Profit Percentage (Short) = Cumulative Open Value / Mark Value
- Mark Value = Position Size * Mark Price
ADL Indicator
With the ADL indicator, you can view the priority of the current position in the ADL queue. The indicator has 5 levels, with each level lit indicating a 20% increase in priority for ADL. The more lights lit, the higher the priority for ADL.
For example, the illustration below shows that the current position's priority is in the bottom 40% of the ADL queue.
You can monitor your position's priority in the ADL queue and reduce the risk of being automatically deleveraged by lowering your leverage or partially closing your position.
If ADL is triggered, you will receive a notification from the system, and any pending orders will be canceled.
How to turn on the ADL indicator?
Once you activate the ADL indicator, you can view the priority of each position in the ADL queue.
Web: CoinEx Navigation Bar > Futures > Futures Trading > Current Position > Filter button in the top right corner > Check Auto-Deleverage
App: The ADL indicator is enabled by default. Please access the above website to disable the indicator.
🔗 Learn more: What is Insurance Fund