> ## Documentation Index
> Fetch the complete documentation index at: https://docs.roxom.com/llms.txt
> Use this file to discover all available pages before exploring further.

# What is Auto-Deleveraging (ADL) and can it affect me?

> Learn how ADL works, when it triggers, and how to reduce your risk of being affected.

**Auto-Deleveraging (ADL)** is a last-resort mechanism used to close positions in profit to cover losses from liquidations when the Insurance Fund is not enough.

It's rare, but it's important to understand how it works.

***

## Why ADL exists

When a trader is liquidated and their position can't be closed at or above the **Bankruptcy Price**, the Insurance Fund covers the loss.

If the Insurance Fund doesn't have enough balance, Roxom uses ADL to automatically close positions from traders on the other side of the market.

<Info>
  **Read how the Insurance Fund works** in the [Insurance Fund](https://docs.roxom.com/rulebook/insurance-fund/insurance-fund-overview) section of our Rulebook.
</Info>

***

## How positions are chosen for ADL

Positions are ranked based on:

1. **Profitability** (percentage PnL)
2. **Effective leverage** (position size relative to margin)

The most profitable and highly leveraged traders are first in line.

<Info>
  **See the exact ADL ranking formula** in the [Auto-Deleveraging](https://docs.roxom.com/rulebook/auto-deleveraging-adl/adl-ranking-algorithm) section of our Rulebook.
</Info>

***

## What happens if you're affected by ADL

* Your position (or part of it) is closed at the **Bankruptcy Price** of the liquidated position
* You keep any realized profit up to that point
* You can reopen a new position immediately if you want

***

## How to reduce your ADL risk

* **Avoid very high leverage**: Lower leverage reduces your ADL ranking
* **Watch your ADL indicator**: The indicator (lights) in the position panel shows your risk level. More lights mean a higher chance of being selected
* **Consider taking partial profits**: If you're high in the ADL ranking, taking profits can reduce your risk

***

## Key takeaways

<Note>
  **Important points:**

  * ADL is rare and happens only when the Insurance Fund can't cover losses
  * If you're chosen, you keep your profits. You just lose the position
  * The ADL indicator in the interface shows your current risk level (between 1 to 5 lights)
</Note>

<Warning>
  This content is for informational purposes only and does not constitute investment advice. Trading digital assets involves significant risk, including the potential loss of your entire investment. Please review our [Risk Notice](/legal/risk-notice) before trading.
</Warning>

***

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