Definition:
When a user is forced to close their position, if the market cannot execute at the bankruptcy price due to insufficient remaining funds to cover the loss resulting in liquidation, the system triggers Automatic Deleveraging (ADL). The ADL system will deleverage users holding positions in the opposite direction, and the order of deleveraging will be determined based on profitability.
Calculation:
Position Mode Leverage Profit Sorting Rule
Isolated Margin
Profitable Position: Leverage Profit = Position Return Rate / Position Margin Rate
Loss-making Position: Leverage Profit = Position Return Rate * Position Margin Rate
Sorting according to leverage profit from high to low
Cross Margin
Profitable Position: Leverage Profit = Position Return Rate / Account Margin Rate
Loss-making Position: Leverage Profit = Position Return Rate * Account Margin Rate
Note: The overall return of all positions (long, short, isolated, cross, merged, split) under the same contract is calculated, and the sorting is based on the descending order of the total profit of a single contract.
USDT contract - Position Return Rate:
Long profit percentage = (Mark Price - Average Opening Price) / abs(Average Opening Price)
Short profit percentage = (Average Opening Price - Mark Price) / abs(Average Opening Price)
Inverse contract - Position Return Rate:
Long profit percentage = abs(Average Opening Price) / (1 / Average Opening Price - 1 / Mark Price)
Short profit percentage = abs(Average Opening Price) / (1 / Mark Price - 1 / Average Opening Price)
Margin Rate:
Position Margin Rate = (Fixed Margin + Unrealized PnL) / Position Value
Account Margin Rate = (Balance + Realized PnL + Unrealized PnL) / (Position Value + Order Freeze Margin * Leverage)
Automatic Deleveraging Indicator Explanation:
According to the above sorting rules, the higher the total return of the position and the lower the position margin rate, the more likely the account will be chosen as the ADL opponent, facing the risk of automatic deleveraging. The five-bar indicator displays the position in the automatic deleveraging (ADL) queue. If all indicators are lit, your position may be reduced after an automatic liquidation event.
1)We rank all positions in terms of profitability, the higher the ranking and the more likely it will be deleveraged.
2)If users wish to avoid automatic deleveraging, they can close their positions and reopen them.
Example:
A user opens a 50x long contract with BTCUSDT using 10,000 USDT, with a liquidation price of 9,000 USDT. If the bankruptcy price is 8,500 USDT, when the market fluctuates and the mark price triggers the liquidation price causing the position to be liquidated, the order is placed at the bankruptcy price, i.e., 8,500 USDT.
If the current market cannot execute the order at the bankruptcy price of 8,500 USDT, the Automatic Deleveraging (ADL) system is activated.
Suppose there are currently 5 short-selling users in a profitable state in the trading pair:
User A, 100 contracts short, ranks top 10% in profitability, with 5 lights on;
User B, 200 contracts short, ranks top 30% in profitability, with 4 lights on;
User C, 50 contracts short, ranks top 50% in profitability, with 3 lights on;
User D, 150 contracts short, ranks top 80% in profitability, with 2 lights on;
User E, 400 contracts short, ranks top 100% in profitability, with 1 light on.
If the user simultaneously holds long and short positions, the number of lights indicating positions for both directions will be the same. For example, if User A's 100 contracts short position consists of 200 short contracts and 100 long contracts, both the short and long position indicators will have 5 lights on.
If the current user needs to be liquidated for 350 contracts, Users A, B, and C, who hold positions opposite to the direction, i.e., profitable and high-ranking users, will be selected for automatic deleveraging, and the forced match will be executed.
Post-Notification:
After automatic deleveraging, users will receive email notifications informing them of the position and the deleveraging price. Users can also find the deleveraging order in the Order History page, where the order type is labeled as ADL deleveraging.
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