What Matters
Auto-deleveraging (ADL) can reduce or close a profitable perpetual position under a venue’s risk rules. If it cuts one leg of a hedge, the other leg can remain open. Check the execution record for the cause, then reconcile the size of both legs before sending a replacement order.
DN Evidence Block
Reviewed 7 November 2026. Bybit’s API labels auto-deleveraging executions AdlTrade and distinguishes them from BustTrade, its takeover liquidation label. OKX Australia documents its own ADL triggers, ranking and matching rules. These are venue-specific records and rules. DN reviewed documentation; we did not trigger or observe live ADL. [1] [2]
How a winning position can shrink
ADL is a venue risk mechanism that can close opposing positions when its documented intervention conditions are met. Your own unrealized gain does not prevent the mechanism from selecting your position. Conversely, a profitable position disappearing is not enough to identify ADL. A user order, bot, stop or other system event may also explain it.
Do not infer an intervention threshold or fill price from an ADL indicator. For example, OKX Australia documents normal matching at mark price and separate conditions for certain pre-market futures. The relevant entity, product and current rulebook matter. The posted queue indicator is not an execution receipt. [2]
DN Hedge Remainder Worksheet
Use this worksheet for one incident. Record timestamps in UTC and compare synchronized snapshots across legs. For inverse contracts, options or mismatched underlyings, use product-specific exposure conversions rather than subtracting raw contract counts.
| Checkpoint | Evidence to record | Question it resolves |
|---|---|---|
| Scope | Venue, account, instrument, position side, position mode and event window | Are the records about the same leg? |
| Cause | Execution type, execution ID, exchange notice and any associated order ID | Is there an actual ADL record? |
| Size | Pre-event size, unique execution quantities, and current position | How much was closed and how much remains? |
| Offset | Current quantity of the other leg in comparable units | How much directional exposure remains? |
| Outstanding orders | Active close orders, bot retries and replacement instructions | What could still alter the position? |
| Cash records | Execution price, realized P&L, settlement currency and fees if recorded | What actually posted to the account? |
Worked example: the short hedge loses 40% of its size
Assume a portfolio holds 1 BTC spot and shorts a linear perpetual with exposure equivalent to 1 BTC. Both legs refer to BTC. An illustrative ADL execution closes 0.40 BTC equivalent of the short; there are no other fills or inventory changes.
Short remaining: 1.00 − 0.40 = 0.60 BTC equivalent. Residual directional exposure: 1.00 − 0.60 = +0.40 BTC equivalent. Hedge coverage: 0.60 ÷ 1.00 = 60% by base quantity.
At a hypothetical common reference price of $100,000 per BTC, the residual exposure is approximately $40,000 in directional notional. That is not a realized loss, margin requirement or guarantee of the next price move. Even a 100% quantity match leaves potential basis, funding, collateral and venue risks.
How to verify the event without double-counting it
Bybit’s execution API supports filtering by execution type. Match the relevant symbol, time range and execution IDs, and check pagination before assuming the result is complete. A dashboard notification and the API entry can describe the same event. Sum the unique executions, then reconcile against the actual current position. [3]
If the cause is missing, mark it unknown. If you find an ordinary exit that only partly filled, use DN’s partial-fill worksheet. If a bot lost track of an order, use the order timeout guide. Those incidents need different records.
Reconcile before restoring the hedge
The old order size is not necessarily the size needed now. First check both current legs and outstanding instructions. Recalculate the gap against the portfolio’s intended exposure and review current liquidity, basis and funding before deciding whether to restore it. For a team, log the decision owner, current snapshot time and evidence supporting the replacement quantity.
For broader venue evaluation, see the DN derivatives backstop study and DN Pathfinder. Affiliate disclosure: linked DN comparisons may contain affiliate links. The venues in this guide illustrate documented mechanics, and the worksheet requires no signup.
Method and limits
DN compared official execution labels and venue documentation, then checked a synthetic linear hedge example. The worksheet is a reconciliation tool. It does not predict ADL, venue intervention prices or portfolio losses. Use contemporaneous records and the rules applicable to your account.
Frequently Asked Questions
Can ADL close a profitable position?
Yes. A venue can select an opposing position for ADL under its risk rules even if that position is profitable.
Does ADL close both legs of a hedge?
Do not assume it does. Check each leg separately. An offset on another venue or a spot holding may remain open.
How do I distinguish ADL from liquidation on Bybit?
Check the execution type. Bybit documents AdlTrade as auto-deleveraging and BustTrade as takeover liquidation.
