What Is Auto-Deleveraging (ADL)?
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Trading
Nov 10, 2021
3 min read
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Auto-deleveraging is a risk management mechanism if a position is closed with negative equity. If a liquidated position can’t be closed at a price better than the bankruptcy price, and the insurance fund is insufficient to cover the negative equity, Bybit’s ADL system will automatically deleverage the opposing position from the trader with the highest ranking at the bankruptcy price of the liquidated order.