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What is ADL?

Updated over 2 months ago

ADL (Auto-Deleveraging) is an automatic mechanism that activates in extreme market situations.

It occurs when:

  • The market moves very sharply.

  • Liquidated positions cannot be closed properly.

  • The system needs to reduce overall risk.

In that case:

  • Some positions with high profit and high leverage may be closed automatically.

  • The closure is done at the available market price.

ADL is infrequent, but it is important to understand how it works.

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