Introduction

This article explains what Auto‑Deleveraging (ADL) is and how it works on Coinlocally Futures. ADL is a risk‑control mechanism that may activate during extreme market conditions when the platform cannot close a liquidated position through the normal liquidation process. When triggered, the system reduces positions from traders with the highest leverage and profit ranking to maintain overall platform stability.

Auto‑Deleveraging (ADL) is a forced position reduction mechanism.

It activates when:

• A counterparty’s position cannot be closed normally
• Insurance funds drop rapidly
• Extreme volatility or force majeure events occur

When ADL is triggered, the system selects traders with the highest leverage return (profit percentage × effective leverage) and reduces their positions first.

How ADL Ranking Works

ADL ranking determines which traders are reduced first.

It is based on:

• Profit percentage
• Effective leverage

The higher the combined value, the higher the trader appears in the ADL queue.

Traders can monitor their ADL priority using the Auto‑Deleveraging Indicator, which has 5 lights.

More lights = higher ADL risk.

How ADL Is Triggered

When liquidation occurs and the system cannot close the position at a price better than the bankruptcy price, the ADL engine takes over.

Key points:

• In Isolated Margin, both long and short positions may be affected.
• In Cross Margin, fully hedged positions are protected. Only the unhedged portion may be reduced.
• ADL executions do not charge fees.
• The system matches the liquidated position with top‑ranked opposite positions at a price calculated from the bankruptcy price and insurance fund compensation.

What Happens After ADL?

When your position is reduced by ADL:

• Your position size decreases
• The realized profit is added to your account balance
• You receive email notifications
• You can see the ADL record in Order History
• You are free to re‑enter the market immediately

Example

A trader has 10,000 USDT and opens a 5 BTC long at 20,000 USDT with 10× leverage.

• Liquidation price: 19,090
• Bankruptcy price: 19,000
• Insurance‑adjusted price: 18,090

If the system cannot close the position above 18,090, ADL activates.

The system then selects top‑ranked short positions (based on profit × leverage) and reduces them until the liquidated position is fully matched.

How to Reduce ADL Risk

ADL only occurs in extreme market conditions, but traders can lower their risk by:

• Reducing leverage, which immediately lowers ADL ranking
• Partially closing profitable positions, which reduces the amount that could be ADL‑executed

Feeling lost?

If you're unsure how ADL works or want help managing your risk, our support team is available 24/7 to guide you step by step.

Updated on: 01/18/2026