ADL

Auto-Deleveraging is the last line of defense in AFX's risk management system. Under extreme market conditions, when normal liquidation processes cannot fully close out positions and the LP Vault cannot absorb the remaining risk, the system activates ADL to reduce counterparty profitable positions and restore the platform's overall solvency.

How It Works

When the system determines that conventional measures can no longer cover the risk exposure, ADL automatically selects traders holding opposite-direction positions for deleveraging. The system considers multiple factors to determine priority — generally, positions with higher profits and higher leverage are selected first.

Deleveraged traders receive the corresponding realized PNL.

How to Reduce ADL Risk

• Lower your effective leverage — add margin or reduce position size

• Take profits when appropriate — realizing partial gains lowers your priority

Key Notes

• ADL events are extremely rare, triggered only as a last resort under extreme market conditions

• ADL is a backstop mechanism designed to protect the funds of all users

• The system exhausts all regular liquidation and Vault takeover options before resorting to ADL