> For the complete documentation index, see [llms.txt](https://docs.ticko.xyz/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.ticko.xyz/trading-on-ticko/auto-deleveraging.md).

# Auto Deleveraging

Auto-deleveraging (ADL) is a last-resort mechanism that closes positions of profitable traders against liquidated positions when the backstop liquidator cannot absorb the loss. ADL ensures the system remains solvent without socializing losses across all users.

## When ADL occurs

ADL can be triggered in two cases:

1. **At takeover**: The backstop liquidator cannot safely absorb a new position at the time of liquidation.
2. **During holding**: The backstop liquidator's existing positions deteriorate beyond its risk limits.

In both cases, opposing positions held by other traders may get closed to restore system solvency.

## Ranking

All traders with open positions on the affected contract are ranked by a combination of profitability and leverage. Traders with higher unrealized profit and higher effective leverage are deleveraged first.

## Execution

When ADL occurs, the selected counterparty's position may get reduced at a price that differs from the current mark price, or outside of the kline range.


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