RE: LeoThread 2025-10-12 18-31

[clsamg]

ADL queue is largely driven by how much leverage is in use

many traders were ADL'd, but those hit first had significant leverage on supposedly delta-neutral positions

Comments

[clsamg]

it's unfortunate — many were affected on the way down, and some were ADL'd right at the pico bottom

[clsamg]

ADL needs to exist, but basis traders being ADL'd despite being delta-zero is a real problem
An exchange's job is to de-risk during volatility, and since ADL sorts by lev*pnl, basis traders end up erroneously near the top of the list