Auto-Deleveraging (ADL)

Auto-Deleveraging (ADL) is a risk management mechanism that activates during extreme market conditions, used only when other protective systems — like liquidation and the insurance fund — cannot cover losses in time.

How ADL Works

When a position is liquidated but the execution price is worse than the bankruptcy price, the system absorbs the remaining loss. However, if the liquidation can't be completed before the Mark Price hits the bankruptcy price, ADL is triggered. This forcibly reduces the size of opposite-side positions held by other traders, starting with those who are most profitable and most highly leveraged.

How ADL Priority is Determined

The system uses a ranking based on a trader's profit and leverage:

PNL Percentage = Unrealized Profit/abs (Position Notional)

Effective Leverage = abs(Position Notional) / (Account Balance + Unrealized Profit)

If PNL Percentage ≥ 0, then ranking = PNL Percentage * Effective Leverage

If PNL Percentage < 0, then ranking = PNL Percentage / Effective Leverage

Leverage PNL Quantile = rank (user.ranking) / Total User Count

The higher your leverage PnL quantile, the higher your ADL risk.

ADL Risk Indicator

The LeveragePnLQuantile bar shows your risk of being auto-deleveraged:

• 4 bars = high ADL risk

• Fewer bars = lower ADL risk

In Aster Pro, the LeveragePnLQuantile bar shows your risk of being auto-deleveraged:

• 4 bars = high ADL risk

• Fewer bars = lower ADL risk

This position is showing 1 of 4 bars - there is a low ADL risk

How to Reduce ADL Risk

• Lower your leverage

• Close and reopen your position to reset your priority in the ADL queue

What Happens If You're ADL'd

Your position is partially or fully reduced without warning. You can re-enter the market at any time afterward.

Additional notes

• The bankruptcy price might fall outside the current trading range, making it harder to fully close your position before losses exceed your margin

• ADL mostly affects traders with high leverage and large unrealized profits