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What Is Rebalancing Bot and Frequently Asked Questions

What Is Rebalancing Bot and Frequently Asked Questions

2023-01-06 03:27

What is the Rebalancing Bot?

The Rebalancing Bot will automatically adjust your portfolio position in the token combination of your choice. By buying low and selling high, your strategy can maintain the same ratio of asset values through rebalancing at preset intervals or thresholds.
The bot’s auto-rebalancing feature can be triggered by coin ratio or time intervals.

Auto Rebalance by coin ratio

This system will only rebalance when the change of any coin ratio exceeds the set threshold value. You may set the threshold value to 0.5%, 1%, 2%, or 5%.
  • Portfolio: BTC & BNB
  • Coin ratio: 1%
  • Amount invested: 800 USDT
  • Initial coin allocation: 50%
With the parameters above, User A holds 400 USDT worth of BTC and 400 USDT worth of BNB in the portfolio when the strategy starts. The system will automatically calculate the ratio of each token in the portfolio.
Suppose after some market movements, the BTC and BNB values in the portfolio become 450 USDT and 550 USDT. The total portfolio value will be 1,000 USDT, and the current coin ratio is 45% (BTC) and 55% (BNB). As the ratio difference exceeds the preset level of 1%, auto rebalance will be triggered.
The system will rebalance the positions by buying 5% of BTC and selling 5% of BNB:
  • BTC value = 450 + (1,000 * 5%) = 500 USDT
  • BNB value = 550 - (1,000 * 5%) = 500 USDT
After rebalancing, User A now holds 500 USDT worth of BTC and 500 USDT worth of BNB, and the coin ratio is restored to 50%.

Auto Rebalance by time

The system will automatically detect whether to rebalance at a fixed interval. You may set the interval to 30 minutes, 1 hour, 4 hours, 8 hours, 12 hours, 1 day, 3 days, 7 days, 14 days, or 28 days.
  • Portfolio: BTC & BNB
  • Time: 7 days
  • Coin ratio: 0.5% (default)
  • Amount invested: 800 USDT
  • Initial coin allocation: 50%
With the parameters above, User A holds 400 USDT worth of BTC and 400 USDT worth of BNB in the portfolio when the strategy starts. As the rebalancing by time condition is set to 7 days, the system will automatically calculate the ratio of each coin in the portfolio every 7 days.
When the current coin ratio exceeds the default level of 0.5%, auto rebalance will be triggered. The rebalancing process is the same as the example above.
Please note that the above examples are only for reference only. In the actual operation of the bot, differences between the rebalanced ratio and the preset ratio may occur due to the consideration of trading fees and trading rules.
Risk warning:
Binance and the Rebalancing Bot service do not determine the suitability of any portfolio or Rebalancing Bot parameter and make no representation or warranty that the Rebalancing Bot strategy will perform as expected or will be profitable. Binance makes no representation about the accuracy of the allocation of categories to tokens or the representativeness of any category portfolio of the associated sector.
Any risk associated with a rebalancing bot strategy resides with the user. Binance shall not be responsible for any losses incurred in connection with any rebalancing bot strategy.
Please read the full disclaimer here.

How to set up a Rebalancing Bot?

1. Log in to your Binance account and click [Trade] - [Strategy Trading].
Click [Rebalancing Bot].
If you are using the Binance App, tap [Strategy Trading] - [Rebalancing Bot].
2. You will be redirected to the Rebalancing Bot trading interface. Go to the parameter box on the right. You can use the [AI Rebalance] for preset parameters or set up your own strategy from [Manual].
2.1 If you choose [AI Rebalance], the system will automatically set up the strategy parameters for you. Click [Create]. You may also click [Copy parameters to Manual settings] to customize the parameters.
2.2 If you choose [Manual], click [Add Coins] to select the coins for your strategy. Please select at least 2 coins. You may select up to 10 coins for each strategy.
Set the rebalancing parameters, including coin allocation, investment amount, and the auto rebalance method. You may also set up a trigger price, a stop-loss price, and a take-profit price under [Advanced (Optional)]. Click [Create].
3. To check your Rebalancing Bot orders and history, go to [Orders] - [Spot Orders] and click [Rebalancing Bot].
You may adjust your investment for a running strategy from [Running]. Click the edit icon to edit, or click [End] to terminate the strategy.
4. For an overview of your strategies, go to [Wallet] - [Overview] and click [Rebalancing Bot].

How to adjust the positions of a running strategy?

Increasing the position

When you increase the investment amount, auto rebalance will be triggered.
  • Portfolio: BTC & BNB
  • Amount invested: 800 USDT
  • Initial coin allocation: 50%
Suppose the price for BTC and BNB have both increased. In the portfolio, the value of BTC is now worth 450 USDT and the value of BNB is now worth 550 USDT. The total value of the portfolio is now 1,000 USDT. The current ratio of BTC and BNB is 45% and 55%.
The user adjusts the investment amount by adding 1,000 USDT. This triggers the system to auto-rebalance BTC and BNB to 50% respectively. The values of BTC and BNB become 1,000 USDT each after the rebalance.

Reducing the position

Please note that you may not be able to reduce a position if the order does not meet the minimum trade amount (10 USDT).
  • Portfolio: BTC, ETH, BNB
  • Amount invested: 400 USDT
  • Initial coin allocation: 5% BTC, 25% ETH, 70% BNB
Using the parameters above, User A holds 20 USDT worth of BTC, 100 USDT worth of ETH, and 280 USDT worth of BNB when the strategy starts.
After the strategy has been active for some time, BTC price dropped and the BTC value in the portfolio becomes 10 USDT. The value of ETH and BNB remain unchanged at 100 USDT and 280 USDT. The total value of the portfolio is now worth 390 USDT.
Assuming User A wants to reduce the position by 50 USDT. The system will sell 35 USDT of BNB, 12.5 USDT of ETH, and 2.5 USDT of BTC. However, as the BTC value (2.5 USDT) does not fulfill the minimum trade requirement (10 USDT), the system will only reduce the position by 47.5 USDT (35 USDT worth of BNB + 12.5 USDT worth of ETH).
After the portfolio size has been reduced, the portfolio will be:
  • BTC value: 10 USDT
  • ETH value: 87.5 USDT
  • BNB value: 245 USDT
  • Total portfolio value: 342.5 USDT
  • Coin proportions: 2.91% BTC, 25.54% ETH, 71.53% BNB

How to enjoy BNB fee deduction?

Rebalancing Bot users can enjoy a 25% discount on standard trading fees whenever they choose to pay the fees with BNB.
You will first pay for the standard trading fee from the Rebalancing Bot Wallet and receive the trading fee refunds in your Spot Wallet. To check your BNB fee history, go to [Orders] - [Rebalancing Bot] - [Fees Return History].
Please note that you must have a sufficient BNB balance in your Spot Wallet to pay for the trading fees. Otherwise, you will not receive your 25% trading fee rebate. For more details, please refer to How to Use BNB to Pay for Fees and Earn 25% Discount.

Frequently Asked Questions

1. How many coins can I invest in a portfolio?
You need to select at least 2 coins. You may select up to 10 coins in one rebalancing strategy.
2. How many active rebalancing strategies can I run?
You can run up to 20 strategies. This includes both pending-trigger strategies and running strategies.
3. What happens when the strategy ends?
If you enable [Sell All Coins on Stop], all of your coins will be sold automatically at market price when the strategy ends. If you don't enable this feature, all of your coins will be transferred to your Spot Wallet.
4. Which wallet does the Rebalancing Bot use?
Rebalancing Bot will transfer assets from your Spot Wallet to your Rebalancing Bot Wallet to support the running of the strategy.
5. How are the fees calculated?
Rebalancing Bot follows the spot trading fee rates. There are no additional fees charged. For BNB fee deduction history, please visit [Fees Return History].
6. Why is my Rebalancing Bot strategy terminated/canceled?
Some possible reasons include:
  • The market price has hit the stop-trigger price you set;
  • The coin in your strategy is delisted or will be delisted soon;
  • The product is no longer available in your region.
7. Which spot order type does the Rebalancing Bot use to buy and sell coins?
The system will place a spot Limit IOC (Immediate-Or-Cancel) order at the current market price. However, when the IOC order fails to execute, a Market order will be placed instead. For more details on how IOC order works, please refer to What Are Maker (Post Only) Order, Time in Force Order, and Iceberg Order.