Auto-Deleveraging (ADL)

When a user's position is forced to be liquidated, the remaining position will be taken over by the liquidation system. If the liquidated position cannot be liquidated in the market and the mark price reaches the bankruptcy price, the automatic position reduction system will automatically reduce the leverage of investors holding positions in the opposite direction. In other words, the contract liquidation targets investors holding positions in the opposite direction. powerful

The order of closing will be determined based on the leverage ratio and profit ratio.

 

1). The position is closed according to the bankruptcy price of the forced liquidation position. If the margin is still insufficient at this time, the automatic position reduction strategy will be triggered.

2). The counterparty calculates the profit and loss ranking of effective leverage based on the rate of return and effective leverage. Aggressive trading strategies and the most profitable positions will be prioritized according to the ADL sequence (automatic deleveraging queue).

3)Automatically reduce positions for the party with the highest effective leverage and profit and loss ranking, and close the position at the bankruptcy price.

Isolated margin mode: When closing a position through isolated ADL, long and short positions are calculated separately without affecting each other.

 

Full-position mode: When a full-position ADL is closed, it is calculated based on the net position.

 

For example: You currently hold 100 long positions and 300 short positions, and your net position is short. ADL sorting is by empty positions. That is to say, if the counterparty's long position is closed, there will be an impact, but if the counterparty's short position is closed, there will be no impact.

 

When investors are forced to close their positions, the remaining part will be taken over by CoinP's forced liquidation system. If the forced liquidation position cannot be closed in the market and the mark price reaches the bankruptcy price, the automatic position reduction system will reduce the positions of investors holding opposite positions. The position reduction will be carried out according to the leverage multiple and profit ratio.

 

 

Profit and loss calculation:

Ranking = Profit Percentage x Effective Leverage (if profitable)

= Profit Percentage ÷ Effective Leverage (if loss)

 

Effective leverage = ABS mark price ÷ (mark price - bankruptcy price)

Profit percentage = (mark price - average opening price) / ABS (average opening price)

Mark price = position price under the mark price

Bankruptcy price = holding price under bankruptcy price

Opening average = position price under available average