For many traders, Auto-Deleveraging can seem counterintuitive. If your position is profitable, your margin is sufficient, and you have not been liquidated, why would the platform reduce it?

The answer lies in how ADL works.

As explained in our previous guide, ADL may be triggered under exceptional conditions when a liquidation leaves a deficit and the Insurance Fund is being depleted faster than XT’s predefined threshold.

Once triggered, ADL affects positions on the opposite side of the liquidated trade. The system ranks those positions according to XT’s published methodology rather than selecting them randomly.

As a result, a profitable position can move toward the front of the ADL queue even when it has not reached its own liquidation condition.

Profitability Does Not Exempt a Position From ADL

ADL and forced liquidation apply to different situations.

Forced liquidation applies when a position no longer meets the required maintenance-margin conditions. ADL, by contrast, may affect ranked positions on the opposing side after the broader ADL trigger conditions have been met.

This means having sufficient margin protects a position from immediate forced liquidation, but it does not automatically remove the position from the ADL queue.

Profitability can actually contribute to a higher ADL ranking when it is combined with high effective leverage.

How Does XT Calculate ADL Priority?

XT uses two main factors to rank profitable opposing positions:

• Profit and Loss Rate (PnL%)
• Effective Leverage

For profitable positions, the ranking follows this logic:

ADL Rank = Profit Percentage × Effective Leverage

A higher result generally moves the position closer to the front of the ADL queue.

This means profit percentage and effective leverage work together:

Position Characteristic	Likely Effect on ADL Priority
High PnL% and high effective leverage	Highest relative priority
High PnL% and lower effective leverage	Lower than an equally profitable, more leveraged position
Lower PnL% and high effective leverage	Depends on the combined ranking result
Lower PnL% and lower effective leverage	Generally lower relative priority

Profitability alone does not determine the outcome. A position with a high return but relatively low effective leverage may rank below another position with a different combination of the two factors.

For losing positions, XT uses a different formula:

ADL Rank = Profit Percentage ÷ Effective Leverage

Losing positions on the opposing side may still face ADL risk. However, because their returns are negative, profitable positions generally receive higher priority.

Effective Leverage Is Not Just the Selected Leverage

Effective leverage is not necessarily the same as the leverage multiple selected when opening a position.

XT calculates effective leverage using the position’s current mark value and bankruptcy value:

Effective Leverage = |Mark Value ÷ (Mark Value − Bankruptcy Value)|

Because these values can change, a position’s effective leverage and ADL priority may also change while the trade remains open.

The ranking is calculated automatically by XT’s trading system. Traders do not need to calculate it manually, but understanding the factors can help explain why the ADL Indicator moves.

How to Read the ADL Indicator

XT displays an ADL Indicator in the Current Positions section of the futures interface.

The indicator uses five visual levels, each representing approximately 20% of the ranking range:

• Fewer illuminated levels indicate lower relative priority.
• More illuminated levels indicate higher relative priority.
• Most or all levels illuminated indicate the highest-priority tier.

If you hold multiple positions for the same contract, the interface may display the priority associated with the highest-ranked position.

A high indicator does not mean ADL will definitely occur. It shows where the position ranks if ADL is triggered for that contract.

A Practical Position Comparison

Suppose ADL has already been triggered after a highly leveraged long position is liquidated during a sharp market decline.

Three traders hold profitable short positions on the opposite side:

Position	Unrealized PnL%	Effective Leverage	Relative ADL Priority
Trader A	High	High	Highest
Trader B	High	Lower	Medium
Trader C	Lower	Lower	Lower

Trader A is likely to rank highest because the position combines a high profit percentage with high effective leverage.

If the system requires an opposing position to be reduced, Trader A may be selected before Traders B and C. This does not mean Trader A violated a rule. The position ranks more highly under XT’s ADL methodology.

This example is simplified for educational purposes. Actual rankings are calculated automatically using current position data.

Queue Priority vs. ADL Trigger Conditions

It is important to separate two questions:

1. Will ADL be triggered?
2. Where does my position rank if it is triggered?

The broader trigger depends on liquidation and Insurance Fund conditions. These include a liquidation that cannot be completed at or above its bankruptcy price, a remaining deficit, and Insurance Fund depletion relative to XT’s predefined threshold.

Your individual queue priority is primarily determined by:

• Profit percentage
• Effective leverage
• Whether your position is on the opposite side of the liquidated trade

A high ADL ranking does not trigger ADL by itself. It only affects the order in which positions may be selected after ADL has already been activated.

What Happens if Your Position Is Selected?

If selected, all or part of your position may be reduced according to the amount required by the system.

The transaction uses the applicable mark price rather than waiting for an order to be matched through the order book. The resulting profit from the affected portion is added to your account balance according to XT’s rules.

Your position is affected because of its relative ranking—not because it has insufficient margin or violated a trading rule.

How Can You Reduce Your ADL Priority?

ADL risk cannot be eliminated completely, but XT recommends several measures that may help manage exposure:

• Use lower leverage where appropriate. Lower effective leverage can reduce the ranking result.
• Take profits periodically. Partially closing a profitable position may reduce its unrealized PnL percentage.
• Maintain sufficient margin. Additional margin reduces forced-liquidation risk and may affect effective leverage.
• Monitor the ADL Indicator. More illuminated levels show that the position has moved into a higher relative tier.
• Watch volatile market conditions. Large price movements and liquidation events can make ADL more relevant.

These measures may reduce your position’s relative priority, but they cannot guarantee that it will not be affected.

Are Coin-Margined Contracts More Susceptible?

Coin-Margined contracts are generally more susceptible to ADL than USDT-Margined contracts.

Contracts denominated in the same cryptocurrency share a common Insurance Fund, which may be smaller in scale. This affects the likelihood of the broader ADL trigger being met, rather than directly changing the PnL% and effective-leverage ranking formula.

Final Thoughts

A profitable position can be auto-deleveraged because ADL is based on system-wide trigger conditions and the position’s relative ranking—not only on whether that individual position has sufficient margin.

For profitable positions, high PnL% combined with high effective leverage generally produces a higher ADL priority.

Understanding this relationship, monitoring the ADL Indicator, and using appropriate leverage can help you better interpret and manage your exposure during exceptional market conditions.

Always review the latest XT product documentation and applicable terms before trading, as platform rules and features may change.

Frequently Asked Questions

Does being profitable automatically increase my ADL risk?

Not by itself. XT considers both profit percentage and effective leverage when ranking profitable positions.

Can I see my exact ADL ranking?

XT displays relative priority through a five-level ADL Indicator. It does not display an exact numerical queue position.

Does a high ADL Indicator mean ADL is about to happen?

No. It indicates your relative priority if ADL is triggered for that contract. It does not show whether the broader trigger conditions will occur.

Can I completely avoid ADL?

No. Lower leverage, periodically realizing profits, maintaining sufficient margin, and monitoring the ADL Indicator may reduce exposure, but they cannot eliminate ADL risk.

About XT Exchange

Founded in 2018, XT Exchange is a leading global digital asset trading platform, serving over 12 million registered users across more than 200 countries and regions, with an ecosystem reach exceeding 40 million. XT Exchange supports 1,300+ tokens and 1,300+ trading pairs, offering a wide range of trading options, including spot, margin, and futures, alongside a secure RWA (Real World Assets) marketplace. Guided by the vision “Xplore Crypto, Trade with Trust,” the platform strives to provide a secure, trusted, and intuitive trading experience.

Join the XT Exchange Community: X (Twitter) | Telegram | Facebook | Instagram | LinkedIn | Medium | YouTube

Risk Disclosure

Trading digital-asset derivatives involves significant risk, including the potential loss of your entire investment. Product availability, eligibility requirements, and platform rules may vary by region and change over time. Always review the applicable documentation, terms, and risk disclosures before trading futures.