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What is Automatic Deleveraging?
2020-11-19 13:30

When the risk protection fund cannot take over the position of the liquidation users, the ADL will be triggered. Bibox will try to avoid this situation as much as possible, for example, by means of Fill and Kill, to minimize the impact of the opponent's liquidation. Due to the high volatility of the digital currency market and the high leverage of the contract market, this situation may still occur. To provide the best user experience, we do our best to reduce the possibility of this happening.

For users, they can judge whether there is a risk of the counterparty's liquidation based on the priority in the queue.

When the counterparty closes the position, we will immediately notify the affected users. At this time, the user's position will be closed at the bankruptcy price. If the user has uncompleted orders, these orders will be cancelled. After the counterparty closes the position, the user can reopen the position at any time.


It should be noted that the bankruptcy price may not be within the transaction price range of the contract market. Therefore, we strongly recommend that users always pay attention to the priority displayed by the "ADL" indicator to avoid the occurrence of counterparty liquidation events.

The user's position in the priority ranking is calculated based on the user's profit and leverage. Generally, the more profitable the trader with higher leverage will be liquidated first. Specifically, users will be ranked based on their margin ratio and the percentage of unrealized profit and loss as collateral. This ranking is called "LeveragePnl" and is calculated as: unrealized profit and loss/margin * margin ratio. For specific formulas, please check the end of this page.

In this calculation method, users will be sorted according to leveraged returns. The user can see the corresponding indicator icon on the page of his account. When the counterparty closes the position, the user will be notified of the closing amount and closing price. Users can re-enter immediately after being automatically reduced positions.

  • Profit and Loss Ratio= Max(0,unrealized profit & loss)/ Max(1,balance of contract account)
  • If(balance of contract account + unrealized profit & loss)≤0,the margin rate = 0
  • If(balance of contract account + unrealized profit & loss)>0,the margin rate = maintenance margin /(account balance + unrealized profit & loss)
  • Leverage profit = margin rate* percentage of profit and loss
  • Leveraged profit ranking interval = ranking (user leveraged profit) / total number of users
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