When a trader’s position is liquidated, the position is taken over by MEXC's Contract liquidation system. If the liquidation cannot be filled by the time the mark price reaches the bankruptcy price, the ADL system automatically deleverages opposing traders’ positions by profit and leverage priority.
The price at which a traders’ positions are closed out is the bankruptcy price of the initial liquidated order.
The deleveraging priority is calculated by profits and effective leverage. This means that the trader who trades aggressively to maximize their profits will be marked with ADL sequence priority. To find out more, refer to the calculations at the end of this article.
Priority Ranking Calculation:
Ranking = PNL Percentage * Effective Leverage (if PNL percentage > 0)
= PNL Percentage / Effective Leverage (if PNL percentage < 0)
Effective Leverage = abs(Mark Value) / (Mark Value - Bankrupt Value)
PNL percentage = (Mark Value - Avg Entry Value) / abs(Avg Entry Value)
Mark Value = Position Value at Mark Price
Bankrupt Value = Position Value at Bankruptcy Price
Avg Entry Value = Position Value at Average Entry Price
The system splits these positions by longs and shorts and ranks the positions from highest to lowest.