Why Is the ADL Indicator Not Always a Real-Time Reflection of the Immediate Risk?

The ADL indicator is a representation of a trader's rank in the queue, which is constantly being recalculated based on market data, unrealized P&L, and effective leverage. While exchanges strive for real-time updates, the risk is ultimately dependent on the next counterparty liquidation.

The indicator shows the current rank, but a sudden, large bankrupt position could immediately jump a trader to the front of the queue, making the indicator lag the true immediate risk.