What Happens If a Liquidation Order Is Filled at a Price Worse than the Bankruptcy Price?

If a liquidation order is filled at a price worse than the bankruptcy price, the trader's account incurs a negative equity, meaning the loss exceeds the collateral. This deficit is then covered by the exchange's insurance fund.

If the insurance fund is insufficient, the loss is covered by the Auto-Deleveraging (ADL) system. The insurance fund's role is precisely to absorb these deficits.