Knowledge Note | Insurance Fund and ADL
① When ADL occurs, the system ranks profitable positions in the opposite direction and closes part of them at the bankruptcy price of the liquidated positions.
② The bankruptcy price is the price at which a position’s losses exactly consume its entire margin; liquidation occurs before the price reaches the bankruptcy price.
③ Closing a position early often results in a smaller loss than waiting to be liquidated: liquidation generally also incurs an additional liquidation fee.
$BTC 82069.69 (+1.51%)
① When ADL occurs, the system ranks profitable positions in the opposite direction and closes part of them at the bankruptcy price of the liquidated positions.
② The bankruptcy price is the price at which a position’s losses exactly consume its entire margin; liquidation occurs before the price reaches the bankruptcy price.
③ Closing a position early often results in a smaller loss than waiting to be liquidated: liquidation generally also incurs an additional liquidation fee.
$BTC 82069.69 (+1.51%)