Auto Deleverage in Cross-Margin Mode
What is Auto Deleverage (ADL)?
When a position is taken over by the liquidation system, and the position is closed at a price lower than the bankruptcy price, the system will use the insurance fund to cover the losses caused by the liquidation. If the insurance fund balance is insufficient, the auto deleverage system will automatically reduce the positions of traders with opposite positions, starting with the most profitable ones.
Auto deleverage protects users from losing more than their position margin when liquidated. It also avoids the rigid socialized loss mechanism during settlement and treats low-risk traders more fairly.
How to Calculate Cross-Margin Auto Deleverage Priority
The auto deleverage priority is determined by the position profit rate. The higher the profit, the higher the priority for the position to be auto-deleveraged. All positions will be ranked separately from high to low based on long and short positions. The calculation method for position ranking is as follows:
Position Return Rate = (Current Mark Price - Entry Price) / abs(Entry Price)
| Scenario | Example |
|
Long on Forward Contract SOL/USDT |
Entry Price: 200 USDT Current Mark Price: 220 USDT Multiplier: 0.1 Position Quantity: 5 Contracts Position Return Rate = (220 * 0.1 * 5 - 200 * 0.1 * 5) / abs(200 * 0.1 * 5) = 10% |
|
Short on Forward Contract SOL/USDT |
Entry Price: 220 USDT Current Mark Price: 200 USDT Multiplier: 0.1 Position Quantity: -5 Contracts Position Return Rate = [(200 * 0.1 * -5) - (220 * 0.1 * -5)] / abs(220 * 0.1 * 5) = 9.09% |
|
Long on Inverse Contract BTC/USD |
Entry Price: 60,000 USDT Current Mark Price: 62,000 USDT Position Quantity: 10 Contracts |
|
Short on Inverse Contract BTC/USD |
Entry Price: 62,000 USDT Current Mark Price: 60,000 USDT Position Quantity: -10 Contracts |
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