ADL & exchange actions
Auto-deleveraging, delistings and halts can remove one leg of your hedge without asking. The other leg does not notice.
Auto-deleveraging (ADL)
When a liquidated account’s losses exceed its collateral and the venue’s insurance fund will not cover the gap, the exchange force-closes traders on the winning side at the bankruptcy price. That is ADL. Profitable positions are selected first — typically ranked by profit and leverage — which is precisely what the winning leg of your hedge looks like during a violent move.
The consequences for a spread trade are structural:
- One leg vanishes at a price you did not choose, at the most volatile moment available.
- No order, no fill notification in the usual flow — some venues message you, some just close it. Your “hedged” position may be naked for hours before you notice.
- It clusters on small caps during squeezes — the same markets and moments where funding spreads are widest.
Most venues show an ADL indicator (a small gauge on the position row) estimating your queue position. On thin perps during fast moves, treat a maxed indicator as a countdown.
Delistings
Exchanges delist perps with days or sometimes hours of notice. Open positions are force-settled at a venue-chosen price at a venue-chosen time. If one venue delists while the other keeps trading, your pair unwinds half-itself at an administrative price — and basis around delisting announcements moves violently, since one side’s market is dying. ARBHUB flags venues in announced delisting with a delist badge in the matrix; treat any wide spread involving a delisting market as a trap first and an opportunity second.
Halts and maintenance
Trading halts, symbol maintenance, order-only modes, and scheduled venue maintenance all do the same thing to a hedge: one leg becomes untouchable while the other keeps moving. Unlike ADL this is usually announced — venue status pages and maintenance calendars are part of position management, not optional reading.
What you can actually do
- Keep leverage low enough that you are never the most attractive ADL target (see Margin & liquidation).
- Check for delisting announcements before entering anything with an unusually wide, persistent gap.
- Know each venue’s rules for force-settlement prices before you need them.