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Who is picked
For each affected market, the traders on the other side are ranked with AdlIndex = ProfitRatio * Notional / Equity. ProfitRatio compares mark and entry (mark over entry for longs, entry over mark for shorts), and Notional / Equity is effective leverage, so the most profitable and most leveraged traders come first.
Accounts that are being liquidated themselves are skipped, and so is the insurance fund. A counterparty position is only ever reduced and never flipped or increased. While its deleveraging runs, that counterparty cannot place new orders on the market, as in a liquidation, and the block lifts when it ends.
At what price
In an isolated liquidation the fills happen at the bankruptcy price of the liquidated position, the point at which the isolated margin is exactly used up. In a cross liquidation they happen at the mark price frozen at the moment the liquidation began, not at the live mark. Both legs settle at that price, and each side's realized profit or loss goes to its balance.
If you are the counterparty
Your fill is flagged as an ADL fill in your history, and a notification reports the market, side, size closed, price and your realized profit or loss. You are not being liquidated: the fill only reduces your position. The liquidation entry covers the trader whose position is being closed.
Sources and checks
Every rule quoted in this article comes from the registry below. Each row names the official page and the day it was compared with the text.
All 6 rules used in this article
| Rule | Value | Official source | Checked |
|---|---|---|---|
| When auto-deleveraging closes a position | closes the position outright against traders on the opposite side | docs.polymarket.com/ | |
| Fees on auto-deleveraging fills | carry no fee for either side | docs.polymarket.com/ | |
| Auto-deleveraging ranking | AdlIndex = ProfitRatio * Notional / Equity | docs.polymarket.com/ | |
| What happens to the counterparty of an auto-deleveraging match | is only ever reduced and never flipped or increased | docs.polymarket.com/ | |
| Auto-deleveraging price for an isolated position | the bankruptcy price of the liquidated position | docs.polymarket.com/ | |
| Auto-deleveraging price of a cross liquidation | the mark price frozen at the moment the liquidation began | docs.polymarket.com/ |
Related terms
Read the full guide
Perps · 8 min
Polymarket Perps Liquidation Explained
How liquidation works on Polymarket Perps: the trigger, the insurance fund, auto-deleveraging, the extra fee and how to read your distance to liquidation.
PolyTerminal is an independent interface for Polymarket and is not operated or endorsed by Polymarket. Orders placed through PolyTerminal carry PolyTerminal’s Polymarket builder code, and PolyTerminal may charge a builder fee on top of Polymarket’s own fees. This page is educational and is not investment advice. Rules were compared with the official documentation on Oct 19, 2026; check the source before you act on a number.