Does the Exchange Profit from the ADL Process?
The exchange does not directly profit from the Auto-Deleveraging (ADL) process. ADL is a zero-sum mechanism designed to transfer value from a profitable position to cover the deficit of a bankrupt position.
The exchange's goal is to maintain the solvency of the market, not to generate revenue from ADL. The exchange may still collect standard trading fees on the portion of the position that is closed during the ADL event, but this is not the primary purpose.
Glossar
Fiduciary Duty
Obligation ⎊ Within the intersection of cryptocurrency, options trading, and financial derivatives, fiduciary duty transcends a mere legal requirement; it represents a profound commitment to prioritizing the interests of clients or beneficiaries above all else.
Trading Fees
Cost ⎊ Trading fees represent a quantifiable deduction from capital employed in executing strategies across cryptocurrency, options, and derivative markets, directly impacting net profitability and risk-adjusted returns.
Crypto Futures
Future ⎊ Crypto futures represent standardized contracts obligating the buyer to purchase or the seller to deliver a specific cryptocurrency at a predetermined price and future date.