# Risk Management

Risk Management Settings 

#### Max Leverage[​](https://gmx-docs.io/docs/trading/v2#max-leverage) <a href="#max-leverage" id="max-leverage"></a>

As a pool’s total open interest grows, the max allowed leverage decreases. This helps protect the pool from high-leverage strategies exploiting price impact. For closing or reducing positions, your collateral won't be affected if leverage limits are hit.&#x20;

**Auto-Deleverage:**

Since all the markets on Cultured are synthetic markets, in extreme scenarios, it is possible that the profit of long positions exceed the value of tokens in the LP pool.&#x20;

To avoid this scenario, ADL (Auto-Deleveraging) may take place. Auto-Deleverage will take place if the protocol has hit a threshold for leverage, in that scenario, positions maybe partially or fully closed based on profitability, position size and collateral. This ensures that the protocol will always be solvant and profits can be paid out.&#x20;

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