Auto-Rebalance
Markets move. When they do, a pair or basket that started balanced drifts one side grows, the other shrinks, and your exposure quietly changes. Auto-Rebalance keeps a position on the target you chose, automatically, so you don’t have to babysit it.
You opt in per position. Orchard then monitors the position and re-trades the legs back to target whenever they drift past a threshold you set.
The two modes
Auto-Rebalance runs in one of two modes pick when you turn it on.
| Weights (default) | Beta | |
|---|---|---|
| Restores | Each leg back to its initial weight | The position back to beta-neutral |
| Triggers when | Any one leg drifts past your threshold | The position’s beta drifts past your threshold over the timeframe |
| Timeframe | Not needed | Required (1h / 4h / 1d) |
| In a sentence | “Simple and predictable” | “Statistically sound best for the purist” |
- Weights mode snaps every leg back to the dollar weights you opened with. If you started 50/50 and the winner grows to 55%, Weights trims it back toward 50%. No timeframe, no statistics to think about.
- Beta mode targets beta-neutrality, it sizes the sides so the position isn’t secretly net-long or net-short the market as beta drifts. It measures beta over your chosen window (1h, 4h, or 1d) and rebalances when it moves past your threshold.
We use two modes because Weights is intuitive and mechanical. Beta is statistically rigorous. It accounts for dollar-neutral positions that are not market-neutral. This can happen when relative asset volatility shifts. Orchard estimates the hedge ratio with a rolling model.
Good to know
- Auto-Rebalance needs a long and a short. It’s only available on positions with at least one long and one short leg, on cross or unified margin.
- Each rebalance is a real trade. Rebalancing places market orders on both sides, which incur the normal trading fees. Tighter thresholds mean more rebalances, and more fees.
- It’s a “set it and check it,” not “set it and forget it.” Orchard pauses a config automatically if the position changes materially or a rebalance repeatedly fails, and tells you why.