In CircleBlack, you can set a Cash Reserve when rebalancing accounts with models. The cash reserve is the amount of cash set aside when trading an account to ensure that the trades can be successfully executed. Using a basic example:
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Account 1 has $5,000 in security A and we have a 20% cash reserve.
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Model X is 50% Security B and 50% Security C.
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We rebalance Account 1 using Model X; the buys and sells are as follows:
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Sell $5,000 of A
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Buy $2,000 of B
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Buy $2,000 of C
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The Cash Reserve of 20% or $100 is swept into (or out of) the default cash product for the account
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Additional Notes:
If the Cash Reserve for the account is greater than the amount of Cash in the account’s model, the model will be adjusted to include the Cash Reserve for the purposes of calculating the trades and tracking the account’s drift.
The Cash Reserve can be set as a default across all accounts and as a custom Cash Reserve on individual accounts. Additionally, Cash Reserve can be set as a percent or a fixed dollar amount.