How Does the Implementation of ADL Differ from a Clawback Mechanism?

Auto-Deleveraging (ADL) is a forward-looking, automated mechanism that immediately closes a portion of a profitable trader's open position to cover a deficit. A clawback mechanism, conversely, is a retrospective action where an exchange attempts to recover funds already realized by profitable traders, often after a large market event has already occurred and a deficit remains.

ADL affects open trades; clawback affects settled profits.