Introduction
Auto Deleveraging (ADL) is a system developed by
Binance for futures trading. It is designed to protect traders from extreme price movements and provide them with a more secure trading environment. ADL works by automatically liquidating a trader's positions when the price moves beyond a certain threshold. This helps to reduce the risk of a trader's positions becoming too large and potentially resulting in a large loss. In this article, we will discuss how ADL works, its benefits, and how it can be used to protect traders.
What is Auto Deleveraging?
Auto Deleveraging (ADL) is a system developed by Binance for futures trading. It is designed to protect traders from extreme price movements and provide them with a more secure trading environment. ADL works by automatically liquidating a trader's positions when the price moves beyond a certain threshold. This helps to reduce the risk of a trader's positions becoming too large and potentially resulting in a large loss.
How Does Auto Deleveraging Work?
When the price of a futures contract moves beyond a certain threshold, ADL will automatically liquidate a trader's positions. The system will then redistribute the profits and losses among the traders who held positions in the contract at the time of liquidation. This helps to reduce the risk of a trader's positions becoming too large and potentially resulting in a large loss.
Benefits of Auto Deleveraging
The primary benefit of ADL is that it helps to protect traders from extreme price movements. By automatically liquidating a trader's positions when the price moves beyond a certain threshold, ADL helps to reduce the risk of a trader's positions becoming too large and potentially resulting in a large loss.
In addition, ADL helps to provide a more secure trading environment. By automatically liquidating positions, ADL helps to ensure that traders are not exposed to excessive risk.
Conclusion
Auto Deleveraging (ADL) is a system developed by Binance for futures trading. It is designed to protect traders from extreme price movements and provide them with a more secure trading environment. ADL works by automatically liquidating a trader's positions when the price moves beyond a certain threshold. This helps to reduce the risk of a trader's positions becoming too large and potentially resulting in a large loss. In addition, ADL helps to provide a more secure trading environment by automatically liquidating positions and ensuring that traders are not exposed to excessive risk.
