What's Futures Auto-Deleveraging (ADL)

What is Auto-Deleveraging (ADL)?

1. When forced liquidation is triggered, the trader's positions will be taken over by the CoinEx liquidation system. If the position is closed at a price lower than the bankruptcy price, the system will use the insurance fund to make up for any losses caused by forced liquidation.

If the insurance fund is insufficient or the liquidation order is not fully executed due to low liquidity, Auto-Deleveraging, or ADL, will be activated.

2. Once ADL is activated, the system will reduce the counter positions of the liquidated traders by profit and leverage based on the Mark Price at the time of trigger. 

For example: If the liquidated trader took a long position, the system will automatically reduce the positions of the short traders to absorb the losses generated by the liquidated long position.


ADL Priority

The ADL priority is calculated by profit and leverage. The more profit and higher leverage of the position, the higher the ADL priority. Additionally, the system will sort the long and short positions separately from high priority to low priority.



Priority = Profit% * Actual Leverage

Actual leverage = Cumulative Open value / Margin

Profit% (Long) = Mark Value / Cumulative Open Value

Profit% (Short) = Cumulative Open Value / Mark Value

Mark Value = Position Quantity * Mark Price


Introduction to ADL Indicator Light

You can check your ADL priority with the ADL indicator lights. The indicator lights are divided into 5 levels, with each level indicating a 20% increase in priority. The more lights that are lit, the higher your ADL ranking and greater priority in the ADL process.


As shown in the above figure, 2 indicator lights mean that your position is in the bottom 40% of the ADL priority list, please refer to [Futures Orders] - [Current Position] for more details.

When forced liquidation is triggered, if the insurance fund is insufficient or the liquidation order is not fully executed due to low liquidity, it's possible that your position will be deleveraged. If ADL does occur, you will receive an email notification and any pending orders will be canceled.

Based on your ADL priority, you can reduce the risk by lowering the leverage or closing part of your position.