ADL Ranking

ADL ranking is a ranking that indicates the possibility of being auto deleveraged when the ADL System is invoked. It consists of 5 different ranks where each light represents a 20% increment to the next percentile. When all the lights are on, that means that the trader is at the top percentile of the auto deleveraging queue. Therefore, the possibility of auto deleveraging of the trader's position can be minimized by reducing leverage to lower their ADL Ranking, or by partially closing the position to reduce the quantity exposed to auto deleveraging.

ADL Ranking Equation

Case 1:
when \begin{align}\scriptsize \textsf{PNL Percentage}= {{\textsf{Avg. Entry Price}\over\textsf{Mark Price}}-1} > 0 \end{align}

$$\small\textsf{Ranking Score} = {{\textsf{Bankruptcy Price}\times{(\textsf{Avg. Entry Price}-\textsf{Mark Price})}}\over{\textsf{Avg. Entry Price}\times{(\textsf{Bankruptcy Price}-\textsf{Mark Price})}}}$$

Case 2:
when \begin{align}\scriptsize \textsf{PNL Percentage}= {{\textsf{Avg. Entry Price}\over\textsf{Mark Price}}-1} < 0 \end{align}

$$\small\textsf{Ranking Score} = {{{(\textsf{Bankruptcy Price}-\textsf{Mark Price})}\times{(\textsf{Avg. Entry Price}-\textsf{Mark Price})}}\over{\textsf{Bankruptcy Price}\times\textsf{Mark Price}}} $$