Lesson 4 of 5

Portfolio rebalancing with exchange-held orders

Over time, winners grow as a share of a portfolio and laggards shrink. That gap between current weight and target weight is called drift. Rebalancing is the practice of bringing weights back toward allocation targets you have already chosen.

In Rebalio, rebalancing is a calculation: it compares a balance snapshot with targets and a drift bound you enter. It does not invent targets, pick assets, or decide that a trade is appropriate. You configure allocation targets and can run a market-order rebalance manually or enable a daily schedule. Dynamic cash, when enabled, adjusts effective targets before drift is calculated. Refreshing balances alone does not submit trades.

Why drift appears

Markets move at different speeds. A holding that rallies becomes a larger percentage of the portfolio even if you never buy more. A lagging holding shrinks as a percentage. Seeing drift clearly helps you decide whether an allocation needs attention.

The inputs Rebalio uses

• Balances and market prices synchronized from your connected spot exchange
• A capture timestamp for that data
• Target percentages you enter that total exactly 100%
• A relative drift bound you enter explicitly

Onboarding starts from your current holdings. Review and edit the rounded percentages and drift threshold before saving. Cash-allocation suggestions are optional and require separate acceptance.

How the math works

• Current weight — an asset’s value in the allocation currency ÷ value of all managed assets
• Percentage-point drift — current weight − target weight
• Relative drift — percentage-point drift ÷ target weight (so percentage points and relative percentages are not confused)
• Relative band — target × your relative bound

Illustration only: a user-entered 50% target with a 10% relative bound describes a band from 45% to 55%. Those numbers are not defaults or recommendations.

When a weight sits outside the band you entered, a quantity difference can be derived by dividing the value gap to target by the supplied price. Trade previews account for estimated fees, available balances, and market size constraints. They do not model taxes or guarantee liquidity or fills.

Entering targets well

• Give every target asset an explicit positive percentage
• Make percentages total 100%
• Enter the relative drift bound yourself
• Include zero-held assets when they belong in your target
• Provide a current price for every target asset when running a calculation—including zero-held assets

Targets stay as you left them until you (or an authorized agent) replace them. Adding or removing an asset does not silently redistribute other percentages. A valid total is arithmetic validation, not an endorsement of the allocation.

Snapshots, display, and execution

1. Rebalio synchronizes your connected exchange account in the background.
2. You save allocation targets and review drift using the latest available snapshot.
3. Preview activation to review corrective trades, standing orders, and funding limitations.
4. Activate to correct out-of-band holdings and install eligible buy/sell pairs on the exchange.
5. Refresh orders manually or enable daily maintenance. Any detected fill, including a partial fill, triggers a rebuild. Uncertain submissions require reconciliation and are never blindly retried.

Credentials are stored in an AES-256-GCM encrypted vault and retrieved only for server-side exchange operations. Balance synchronization does not replenish orders. Open orders are not assumed to fill; pending and uncertain orders block conflicting execution.

Limits of the calculation

Previews depend on exchange data and configured assumptions. Prices and balances can change before submission. Fees, minimum sizes, available balances, and available funds are checked, but taxes and future liquidity are not predicted. A preview is not investment advice or a fill guarantee.

Practical habits around the numbers

• Revisit targets when your goals or risk tolerance change—not every time a chart moves
• Treat drift bands as your rule, documented on purpose
• Review exchange fees and consider tax effects before approving trades
• Keep emergency cash and long-term risk capital conceptually separate (see safety net)

Important: Rebalio provides calculations, not individualized investment, tax, or legal advice. Investing involves risk, including loss of principal.

Resting bands and cash

Allocation bands are converted into prices at each rebuild. With a 50% asset allocation and 50% cash, a 45–55% weight band corresponds to approximately −18.2%/+22.2% price moves. Other holdings moving makes those prices approximate afterward. Buys share free managed cash; open sells cannot fund them until filled. Cash itself has no pair, and exchange minimums or unavailable funds may leave reduced coverage.

After a fill, replenishment waits for Refresh orders or the next daily run. Stop cancels Rebalio orders; disabling scheduling leaves them open. Changing targets immediately rebuilds active orders.