In LBank futures trading, the Automatic Deleveraging (ADL) mechanism serves as a critical safeguard to maintain platform stability and ensure fairness among users. It activates during extreme market volatility when forced liquidations occur, prioritizing the reduction of positions held by high-risk (typically highly profitable) users to protect overall market liquidity. By understanding and monitoring your ADL ranking, LBank users can optimize position management, control risk exposure, and improve overall trading performance.

Core of the ADL Mechanism: Dynamic Ranking Updated Every Minute

LBank updates ADL rankings for all futures positions every minute. Users are divided into two separate groups based on position direction:

If you hold positions in both directions, you may appear in both groups simultaneously.

  1. Long ADL Group (LADLGroup): Users holding long positions (LPosition ≠ 0)

  2. Short ADL Group (SADLGroup): Users holding short positions (SPosition ≠ 0)

Exclusion Rules (to ensure only profitable positions are ranked):

  1. Cross Margin Mode (MType = Cross): Users with UPL ≤ 0 are excluded from both groups.

  2. Isolated Margin Mode (MType = Isolated): Long positions with LUPL ≤ 0 are excluded from the long group; short positions with SUPL ≤ 0 are excluded from the short group.

This design prevents loss-making positions from being prioritized for deleveraging.

ADL Score Calculation: Quantifying Your Risk Level

The ADL ranking is determined by the ADL Score, calculated as follows:

ADLScore = UPL × MM ÷ max(1, WalletBalance) ÷ (WalletBalance + UPL)

Key components:

  1. UPL (Unrealized PnL): Reflects current profit/loss on open positions

  2. MM (Maintenance Margin): Required margin to maintain the position

  3. WalletBalance: Account balance, used for normalization to prevent distortion by extreme values

Calculation varies by margin mode:

Cross Margin Mode

📌MM means total maintenance margin for both long and short positions

UPL = [LPosition × (LastPrice - LEnterPrice) + SPosition × (LastPrice - SEnterPrice)]

(positions signed positive/negative)

The same ADLScore applies to both long and short groups

Isolated Margin Mode

Long

  • LUPL = LPosition × (LastPrice - LEnterPrice),

  • MM = Long Maintenance Margin → LADLScore

Short

  • SUPL = SPosition × (LastPrice - SEnterPrice)

  • MM = Short Maintenance Margin → SADLScore

⚠️Important: A higher ADL Score indicates a larger profit relative to position size and account balance — meaning higher deleveraging priority in extreme conditions.

ADL Ranking & Tiers: Quickly Assess Your Position

Within each group, users are sorted by ADL Score in descending order:

  1. Long group → LADLList (Rank 1 = LADLRank = 1, highest priority)

  2. Short group → SADLList (Rank 1 = SADLRank = 1, highest priority)

Your ADL Section (percentage rank = your rank ÷ total users in group) determines your ADL Grade/Tier, displayed via indicator lights on the platform:

  1. 0.00 ~ 0.20: Tier 4 (Red, 4 lights) — High risk; consider immediate position adjustment

  2. 0.20 ~ 0.40: Tier 3 (Orange, 3 lights) — Elevated risk; closely monitor market movements

  3. 0.40 ~ 0.60: Tier 2 (Blue, 2 lights) — Moderate risk; stay vigilant

  4. 0.60 ~ 0.80: Tier 1 (Green, 1 light) — Low risk; position relatively safe

⚠️Above 0.80: No lights displayed — Very low risk

Practical Ways to Use ADL for Better Trading

ADL is more than just a warning system — it’s a powerful reference for strategy optimization:

  1. Monitor Your Ranking Regularly

    • 
Check your ADL tier and lights in the LBank App or web platform. Red/orange indicators signal high profit concentration — consider reducing position size, taking partial profits, setting tighter take-profit/stop-loss orders, or lowering leverage.

  2. Enhance Risk Management

    • 
Maintain moderate UPL and MM levels. In isolated margin mode, manage long and short positions separately for more precise directional risk control.

  3. Timing & Strategy Adjustment


    • In highly volatile contracts, use ADL rankings to guide entries/exits. If the long group shows many high-rankings, it may indicate overheating — consider reducing longs or hedging with shorts.

  4. Combine with Market Analysis


    • Aggregate ADL data reflects overall trader sentiment. Spikes in high-tier users can signal potential reversals. Use ADL alongside technical analysis (K-lines, indicators) for more informed decisions.

Reminder

ADL exists to protect platform fairness and stability — it is not a penalty, but a last-resort mechanism. It should complement, not replace, disciplined trading practices. Regularly review positions, maintain proper risk controls, and leverage LBank’s educational resources.

Start today: Log in to LBank, check your futures positions’ ADL indicators, and take proactive steps to strengthen your trading approach.

Questions? Feel free to contact LBank Customer Support. Happy and safe trading!