> For the complete documentation index, see [llms.txt](https://yubit.gitbook.io/yubit/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://yubit.gitbook.io/yubit/derivatives-trading/futures-faq/what-is-auto-deleveraging-adl.md). # What Is Auto-Deleveraging (ADL)? ## **What Is Auto-Deleveraging (ADL)?** **Auto-Deleveraging (ADL)** is a risk-control mechanism used in perpetual futures. When extreme market volatility causes a liquidation order to fail due to insufficient liquidity, the system may automatically reduce or close positions from traders on the **profitable opposite side** to maintain overall market stability.**In simple terms:** 👉 ADL occurs when the system must reduce profitable positions to offset losses caused by liquidations that cannot be fully executed. *** ### **Why Does ADL Exist?** Normally, when a user’s position is liquidated and their account goes negative, the platform’s **Insurance Fund** absorbs the loss.However, during extreme volatility, the insurance fund may not be sufficient.When this happens, ADL is triggered to prevent further systemic risk.In such cases, the system reduces positions from opposing traders whose positions are ranked highest based on leverage and profit. *** ### **Which Positions Are Most Likely to Be Deleveraged?** ADL is **not random** — positions are ranked and processed based on: 1. **Leverage** (higher leverage = higher priority for ADL) 2. **Unrealized PnL percentage** (higher profit = higher priority) 3. **Position size** \ **Summary:** 👉 High-leverage + high-profit positions have the greatest chance of being auto-deleveraged. *** ### **What Happens When ADL Is Triggered?** If your position is selected for ADL: * The system will close part or all of your position * The execution is done at the **Index Price or a fair price**, not via the order book * **No additional fees** are charged * The process is fully automatic and does not require user action * ADL is a risk-protection mechanism, not a penalty *** ### **How to Reduce Your ADL Risk** You can lower the likelihood of being auto-deleveraged by: * Reducing your leverage * Maintaining moderate position sizes * Avoiding high-leverage profitable positions during extreme volatility * Taking profits early to prevent your position from ranking high in the ADL queue --- # Agent Instructions This documentation is published with GitBook. GitBook is the documentation platform designed so that both humans and AI agents can read, navigate, and reason over technical content effectively. Learn more at gitbook.com. ## Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter, and the optional `goal` query parameter: ``` GET https://yubit.gitbook.io/yubit/derivatives-trading/futures-faq/what-is-auto-deleveraging-adl.md?ask=&goal= ``` `ask` is the immediate question: it should be specific, self-contained, and written in natural language. `goal` is optional and describes the broader end goal you are ultimately trying to accomplish on behalf of the user. GitBook uses it to tailor the answer towards what is most useful for that goal. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.