Auto-deleveraging (ADL)
Auto-deleveraging is the last step when a liquidated position's loss exceeds its margin and the insurance pool: the venue closes part of the most profitable opposing positions to cover it. It can shut a correct trade; where the loss goes is a Module 3 question, and the liquidation page says what Mochatrade does.
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In the help centreLearn what a perpetual contract is on MochatradeRelated terms
- Insurance fundAn insurance fund is the pool a venue uses to cover losses when a liquidated position's margin is not enough, so…
- Liquidation priceThe liquidation price is where the venue closes your leveraged position, computed from entry, leverage and margin…
- Mark priceThe mark price is the price a venue judges your position by, for unrealised profit and liquidation, built from the…
- Isolated marginIsolated margin ties a fixed amount of margin to one position, so that position can only lose what you gave it and the…
- Negative balance protectionNegative balance protection means you cannot lose more than the money in your account, even when a gap jumps past your…
- Liquidation / forced square-offLiquidation, or forced square-off, is the venue closing a leveraged position because the margin can no longer cover…
Educational content only. Not investment advice. Leveraged products magnify losses as well as gains.