Thresholds In SMArtX

Platform-wide default threshold parameters are applied on all newly created Targets and can impact the frequency and tolerance bands of your rebalance activity

Rebalance Thresholds - sets the range of acceptable fluctuation (drift) for a component within a target based on its initial weight

Tighter thresholds alert more frequently, ensuring closer alignment to targets, while wider thresholds allow more drift, reducing the frequency of rebalancing alerts. For example, increasing rebalance thresholds can reduce non-trading entries in the rebalancer by flagging only accounts with significant drift.

Precision Thresholds - how close to the original target the advisor wants the rebalance to trade to

For example, with a 50% target and ±4% precision, the acceptable post-rebalance range is 48%–52%. Wider precision thresholds are particularly useful for smaller accounts or when securities are relatively expensive compared to the account’s assets under management (AUM).