> For the complete documentation index, see [llms.txt](https://docs.afx.xyz/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.afx.xyz/trading-rules/adl.md). # 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 --- # 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 by asking a question. Perform an HTTP GET request on the following URL with the `ask` and `goal` query parameters: ``` GET https://docs.afx.xyz/trading-rules/adl.md?ask=&goal= ``` `ask` is the immediate question: it should be specific, self-contained, and written in natural language. `goal` is what the user is ultimately trying to achieve, the reason they need the answer. Sharing it helps GitBook give you a better, more relevant answer. A goal is most helpful when it describes the outcome the user wants rather than restating the question. For example, with `ask=how do I create an API token`, a goal like `automate deployments from our CI pipeline` lets GitBook tailor the answer to that use case. 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.