Can ADL Be Triggered during Periods of Low Market Volatility?

Yes, Auto-Deleveraging (ADL) can be triggered during periods of low market volatility, although it is less common. ADL is triggered by a deficit that the insurance fund cannot cover.

A deficit can occur even in low volatility if a very large, highly leveraged position goes bankrupt and the market lacks the liquidity to absorb the liquidation order without significant slippage, resulting in a shortfall. The key factor is the deficit, not the general market volatility.