What Happens If the Liquidation Engine Cannot Fully Close the Position in Time?
If the market moves rapidly against the liquidated position, the liquidation engine may not be able to fully execute the closing orders before the account balance reaches zero. This results in a deficit, meaning the account owes the exchange money.
In this scenario, the insurance fund is utilized to cover this shortfall. This action prevents the loss from being passed on to other traders through the Auto-Deleveraging system.
