Is there a required cash buffer to execute or rebalance?
Last Updated last year
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Yes — we recommend maintaining a small cash buffer in your broker account before executing or rebalancing.
This helps manage:
- Rounding adjustments in order values
- Brokerage fees and taxes
- Minor price movements between order placement and execution
- Buy and sell overlap during rebalancing — since both buy and sell orders are placed together, the proceeds from sell orders aren’t instantly available. A cash buffer ensures buy orders can still go through smoothly.
If there’s insufficient balance, some trades may fail or partially execute.