What is the difference between Auto-Deleverage (ADL) and liquidation on Crypto Futures?
The difference is whose margin caused the event. Liquidation happens to your position because your own Margin Level reached 100% and you no longer hold enough margin to keep the position open. Auto-Deleverage (ADL) happens to your position because a different trader was liquidated, their position could not be settled in the order book, and yours was selected on the opposite side to square the trade off. In a liquidation you lose the margin backing the position; in an ADL your position is closed at the Auto-Deleverage Price and the resulting profit or loss is realised as normal. Liquidation is something you can see coming and prevent by adding margin or reducing exposure. ADL is not preventable, gives no advance warning, and can close a position that is comfortably in profit.
| Aspect | Margin Call | Liquidation | Auto-Deleverage (ADL) |
|---|---|---|---|
| What causes it | Your Margin Level rises past 50%, then 75% | Your Margin Level reaches 100% | Another trader's liquidation cannot be settled in the order book |
| Whose margin is at fault | Yours | Yours | Not yours |
| What actually happens | Alert sent; past 75% only reduce-only orders are accepted | All open orders are cancelled first, then your positions and remaining margin transfer to the clearing liquidation account | The selected opposing position is closed at the Auto-Deleverage Price |
| Can you prevent it | Yes — add margin or reduce exposure | Yes, if you act before Margin Level reaches 100% | No |
| Advance warning | Yes, at two thresholds | Yes, via the margin call sequence | No |
| Can it hit a profitable position | No | No | Yes — those are the ones reached first |
| Price used | Mark price | Liquidation price, based on mark price | Auto-Deleverage Price |
- They sit at opposite ends of the same chain. Margin call and liquidation are the platform managing your risk. ADL is the platform settling someone else's risk when every funding layer between you and it has already been used up.
- The order of events is fixed. Nothing skips straight to ADL. A trader must first be liquidated, the clearing liquidation account must fail to exit that position in the order book, and the maintenance margin, broker security deposit, and communal insurance fund must all be exhausted before ADL is reached.
- What ADL is not. It is not a penalty, not a fee, and not a sign your account has a problem. Your account can be in perfect standing at the moment ADL closes a position.
Related questions:
Q: Is Auto-Deleverage the same as a margin call?
No, and they sit at opposite ends of the risk chain. A margin call is an early warning about your own account: your Margin Level has risen past 50% or 75%, and you are asked to add margin, with only reduce-only orders accepted past the higher threshold. ADL involves no warning and no account of yours being at risk — it is triggered entirely by another trader's failed liquidation.
Q: If I am auto-deleveraged, do I lose my margin the way I would in a liquidation?
No. In a liquidation the margin backing the position is transferred to the clearing liquidation account along with the position itself. In an ADL your position is simply closed at the Auto-Deleverage Price and the profit or loss is realised in the normal way, so the margin that was supporting it returns to your available balance rather than being forfeited.
Q: Which is worse for me, liquidation or ADL?
Liquidation is generally worse, because it means the margin backing that position has been lost. ADL closes your position at a defined price and the margin supporting it returns to your balance, so what you actually realise depends on where that price sits relative to your entry. What makes ADL frustrating is usually not the amount but the loss of control — a trade you wanted to keep running is ended for you, at a moment and a price you did not choose.
Q: How do I tell which one happened to my position?
Check two things. First, whether you received margin call alerts in the period before the position closed — a liquidation is always preceded by your Margin Level climbing through the 50% and 75% thresholds. Second, the notification itself, since an Auto-Deleverage event sends its own notification. The closing transaction and its realised P&L are recorded in your Crypto Futures transaction history either way.
Q: Can liquidation and ADL both affect me during the same market event?
Yes, though not on the same position at the same moment. A sharp move can liquidate one of your positions while a separate position of yours, held on the opposite side of a different contract, is selected for ADL. They are independent mechanisms responding to the same volatility, so both appearing in your history on the same day is possible.