If the ADL indicator lights up, it means your position is at the front of OKX's auto-deleveraging queue and is at high risk. This is the platform's final liquidation mechanism, activated only in extreme market conditions when the insurance fund cannot cover all liquidation losses. It works by closing some of the most profitable positions to fill the risk gap.
The good news is, this is a risk signal you can actively respond to. As soon as the indicator lights up, you can immediately adjust leverage or add margin to move yourself down the ranking and exit the list of positions the system prioritizes for deleveraging.
Step 1: Understand the ADL Indicator and Assess Your Risk Rank
In the futures trading interface, in the positions area, each position has an ADL indicator next to it, made up of 1 to 5 bars. The more bars lit, the closer your position is to the front of the ADL queue. If 4 to 5 bars are lit, it means that if auto-deleveraging occurs, your position will likely be processed first by the system.
The core ranking algorithm is based on "leverage return rate": the higher your profit and the higher your leverage, the closer you are to the front of the queue. Positions with high leverage and high unrealized profits are the prime targets for ADL.
Success criteria: You can clearly state how many bars are lit for your position's ADL indicator and what leverage multiple it currently uses.
Step 2: Immediately Take Action to Reduce Risk
If the indicator is lit, the situation is urgent. Don't hesitate; execute any of the following operations right away:
Option A: Lower leverage (most direct)
In the ADL ranking formula, effective leverage is a direct multiplier. Lowering your leverage will immediately reduce your risk score.
How to do it:
- After opening a position: Click the leverage multiplier icon in the position row, select a lower multiplier (e.g., from 20x to 10x), and confirm. It will take effect immediately.
- Note: When reducing leverage, the margin required for the position increases. If your available balance is insufficient, the system will prevent the change, and you'll need to add margin first then try again.
Option B: Add Margin
Adding margin lowers your account's effective leverage, which pushes your ranking down in the ADL queue.
How to do it: In the position details page, click "Add Margin", enter the amount, and confirm. It takes effect immediately.
Option C: Partially Close Position to Reduce Risk Exposure
Partially closing your position directly reduces your notional value and leverage return rate, pushing your ranking backward.
How to do it: On the position page, click the "Reduce" button, enter the quantity to close, and submit. The position size will shrink, and the maintenance margin requirement will also decrease.
Common mistake: Some traders see the lights and think they can just ride it out. But when the ADL indicator shows 4-5 bars, it's often just before extreme volatility. If the system actually triggers ADL, your position will be forcibly closed at the mark price or even bankruptcy price, and it will be too late to act.
Step 3: Know the Trigger Conditions and Anticipate
ADL doesn't happen all the time; it only activates under specific conditions. Understanding the trigger thresholds allows you to react earlier.
According to OKX's official rules, one of the ADL trigger conditions is: the insurance fund drops more than 30% from its peak within 8 hours, or the insurance fund is completely depleted.
This indicates that ADL typically occurs during periods of sharp market volatility and a flood of forced liquidations. If you see the market suddenly crash/pump, liquidity dries up, and your ADL indicator is flashing, that's your final window to act.
Success criteria: You understand that the ADL indicator is not just a scare tactic; it's a real risk signal calculated from leverage return rate and position size, and needs to be taken seriously.
How to Verify Your Adjustments
After performing the above actions, go back to the futures interface's positions area and check two things:
- ADL indicator: Has the number of lit bars noticeably decreased (e.g., from 5 bars to 2-3 bars)?
- Leverage multiple: Has it been lowered to a safer level?
If both have improved, your actions were effective and your risk ranking has dropped. Also, it's recommended to set a stop-loss order near the current price as an extra safety cushion.
If you have a large position and don't want to monitor frequently, consider using a Delta-neutral strategy. In this mode, fully hedged positions rank further back in the ADL queue, significantly reducing the chance of being picked. Once set, check the ADL indicator periodically (e.g., once a week) and make it a habit, like checking your car's dashboard.
