What Is the Process of “Deleveraging” a Position in the ADL System?
When a trader is selected for ADL, their position is forcibly closed at the bankrupt position's bankruptcy price. The system "deleveraging" means it takes the profitable position and closes it to cover the loss of the bankrupt counterparty.
The affected trader receives the value of their closed position in collateral, minus the amount used to cover the deficit. This closure reduces the overall leverage exposure on the platform.
