When traders are liquidated, their remaining positions will be taken over by XT.COM perpetual contract liquidation system. If the forced liquidation position fails to close in the market, and when the mark price reaches the bankruptcy price, the Auto Deleveraging system will reduce the position of the investor who hold opposite positions. The order of reducing positions will be determined based on leverage and profit ratio.
Auto Deleveraging ordering system
(1) Reduction process
The position is closed according to the bankruptcy price of the forced liquidation position of the trader. When the insurance fund is still insufficient at this time, the auto deleveraging strategy will be triggered.
The counterparty calculates the PnL rank of effective leverage by percentage of return and effective leverage.
Traders with aggressive trading strategies and the most profits will be marked preferentially by the ADL order.
Automatic reduction of ADL executed parties and the top traders of effective leverage PnL at bankruptcy prices.
(2) ADL indicator
The ADL indicator will alert your position according to the order of all positions you hold in the contract (take the highest). At any time, your position in the order will be indicated by this indicator and represents your priority in the ranking in 20% increments.
All the lights are on means you're in the top percentile. In the event that you are unable to liquidate your position in the market, your position is likely to be reduced.
You will be notified if your position is automatically reduced. The order will be cancelled and you can re-open the position.
(3) Auto deleveraging ordering formula
ADL Rank = Profit Percentage * Effective Leverage (if profitable)
ADL Ranking = Profit Percentage / Effective Leverage (if loss)
In which:
Effective Leverage = abs (Mark Value / (Mark Value - Bankruptcy Value))
Profit Percentage = (Mark Value - Average Open Value) / abs (Average Open Value)
Mark Value = Position value at mark price
Bankruptcy Value = Position value at bankruptcy price
Average Open Value = Position value at average open price
The system separates the long and short sides and sorts them from high to low.