Contract Trading | Insurance Fund and ADL
What it is: The bankruptcy price is the price at which losses on a position exactly consume all margin; liquidation is triggered before the price reaches the bankruptcy price.
Why: ADL is intended to prevent losses from going uncovered. A side effect is that a small number of profitable positions may be partially reduced by the system.
In practice: Proactive stop-losses usually result in smaller losses than waiting to be liquidated: liquidation generally also incurs a separate liquidation fee.
$BTC 83928 (+1.15%)
#BTC
What it is: The bankruptcy price is the price at which losses on a position exactly consume all margin; liquidation is triggered before the price reaches the bankruptcy price.
Why: ADL is intended to prevent losses from going uncovered. A side effect is that a small number of profitable positions may be partially reduced by the system.
In practice: Proactive stop-losses usually result in smaller losses than waiting to be liquidated: liquidation generally also incurs a separate liquidation fee.
$BTC 83928 (+1.15%)
#BTC