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What Is the Impact of a Low Fund Balance on Trader Behavior?

Increased perceived ADL risk leads to reduced leverage, lower liquidity, and potential migration of traders to other exchanges.
Greeks.Live23.11.25

What Is the Impact of a Low Fund Balance on Trader Behavior?

A low fund balance increases the perceived risk of Auto-Deleveraging (ADL). This typically causes traders to reduce their leverage, close profitable positions to realize gains before being ADL'd, or migrate to a different exchange with a healthier fund.

The overall effect is a decrease in market liquidity and trading volume on the affected exchange.

How Do Exchanges Use ‘Auto-Deleveraging’ (ADL) in Extremely Volatile Markets?
Why Do Most Major Exchanges Prefer the ADL System?
How Does ‘Auto-Deleveraging’ (ADL) Relate to the Insurance Fund?
What Criteria Determine Which Profitable Traders Are Selected for ADL?

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