How Auto-Deleveraging Selects Futures Positions When Insurance Funds Run Out
Summary
The document explains auto-deleveraging as a futures-market risk control that can activate when an insurance fund for a coin is depleted and liquidation losses remain uncovered. The exchange then reduces selected counterparties’ positions to help cover the shortfall. According to the text, the process ends when the fund is replenished, and it is intended for extreme conditions rather than ordinary liquidations.
Selection is described as depending on profitability and leverage risk: profitable positions and positions with greater leverage are more exposed. The stated ranking calculation differs between cross and isolated margin, using account or position maintenance-margin rates alongside return on investment. Selected positions may be partially or fully closed at the bankruptcy price, with active orders canceled and no fee charged for the automatic closure. Traders can view a ranking indicator in the interface. The article is specific to Bitget and gives no independent operational evidence or worked calculation, so its formula and procedures should be checked against current exchange documentation.
Key ideas
- Auto-deleveraging is described as a response to uncovered liquidation losses after an insurance fund is depleted.
- The selection ranking considers position profitability and leverage-related risk.
- The stated ranking inputs differ for cross-margin and isolated-margin positions.
- An affected position may be closed at the bankruptcy price and its active orders canceled.
- The exchange interface provides an indicator of a trader’s relative ADL exposure.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.