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Binance explains how auto-deleveraging can cut profitable Bitcoin futures hedges
Binance says its auto‑deleveraging (ADL) rules may reduce a profitable short position that offsets a Bitcoin holding. In a hypothetical example, a trader with 1 BTC spot and a 1 BTC linear futures short that becomes profitable could have the short cut to 0.5 BTC, leaving half the hedge exposed. Binance’s November 2 reserve‑proof update confirmed that ten tokens, including Bitcoin, were backed 1:1 at the Oct 31 snapshot. The exchange clarified that only surplus futures insurance reserves were reallocated and that ADL can be triggered when takeover capacity is reached or unrealized losses exceed the fund’s balance. ADL priority considers profitability and leverage, allowing winning positions to be selected for reduction. The guidance notes that Delta‑Neutral accounts may receive lower ADL priority but are not exempt.