1) ADL is a contract loss mechanism that will only be activated when there are insufficient funds inside the insurance fund to fully cover the contract losses of a liquidated position.
- This also means that as long as the insurance fund is substantial, the chances of ADL occurring will also be minimized.
- To check on the history of the Bybit Insurance Fund, please click here
2) Traders can manage the exposure to ADL by lowering your leverage or do a partial closing of your profiting position.
- Lowering the leverage will lower the ADL ranking in real-time
- Doing a partial closing of a profiting position does not lower the ADL ranking but reduces the number of contracts that are exposed to ADL risk. To understand how to partial close, please click here
- If partial closing does not address your concerns, please consider doing a full closure of your existing positon. To understand how to do a full position closing action on Bybit, please click here