Liquidation Queue Priority

Liquidation queue priority determines which profitable traders are targeted first when an Automatic Deleveraging system is activated. The queue is typically ordered by a combination of the trader's return on equity and the amount of leverage they are utilizing.

Traders with the highest profits and highest leverage are ranked at the top of the queue, as they are considered the most exposed to the system's volatility and thus the most appropriate to absorb the risk. This hierarchy is designed to ensure that the impact of deleveraging is distributed in a way that minimizes systemic disruption.

Traders are often provided with tools or indicators to see their current position in the queue, allowing them to manage their exposure proactively. Understanding this ranking is a vital part of risk management for institutional and high-frequency traders in the derivatives space.