Auto Deleveraging---ADL

When a trader’s position is liquidated, the position is taken over by the Hotcoin liquidation engine. If the liquidation cannot be filled by the time the mark price reaches the bankruptcy price, the ADL system automatically deleverages opposing traders’ positions by profit and leverage priority.

ADL process：

1）Insurance Fund is used to prevent ADL. If it is depleted for a given contract, ADL will occur.

2）Deleveraging priority is calculated by profit and leverage. More profitable and higher leveraged traders are deleveraged first.

3）The price at which a traders’ positions are closed out is the bankruptcy price of the initial liquidated order.

-ADL indicator represents your priority in the queue. All five lit lights mean your position will possibly be deleveraged.

Benefits of ADL

If you are deleveraged, you will be sent a notification. Open orders will be cancelled and you are free to re-enter.

Other trading platforms:

1）Single high-risk user may cause big losses to all users.

2）Profits are locked up until settlement, which has greatly lowered the assets efficiency.

ADL Priority Deleveraging Ranking

The ranking calculation is as follows:

Ranking = PNL Percentage * Effective Leverage  (if PNL percentage > 0)

        = PNL Percentage / Effective Leverage  (if PNL percentage < 0)

where

  Effective Leverage = abs(Mark Value) / (Mark Value - Bankrupt Value)

  PNL percentage = (Mark Value - Avg Entry Value) / abs(Avg Entry Value)

  Mark Value = Position Value at Mark Price

  Bankrupt Value = Position Value at Bankruptcy Price

  Avg Entry Value = Position Value at Average Entry Price

The system splits these positions by longs and shorts and ranks the positions from highest to lowest.