# Continuous Rebalancing ⎊ Area ⎊ Resource 2

---

## What is the Adjustment of Continuous Rebalancing?

Continuous rebalancing involves the constant adjustment of a portfolio's asset weights to maintain a predetermined risk exposure. This process is critical for delta hedging options positions, where the portfolio's sensitivity to price changes must be kept near zero. The frequency of these adjustments differentiates it from discrete rebalancing methods.

## What is the Strategy of Continuous Rebalancing?

As a trading strategy, continuous rebalancing aims to mitigate risk by systematically buying or selling underlying assets as their prices fluctuate. In options trading, this technique is used to manage the delta of a position, ensuring the portfolio remains hedged against market movements. The strategy's effectiveness depends heavily on execution speed and transaction costs.

## What is the Risk of Continuous Rebalancing?

The primary objective of continuous rebalancing is to manage risk, specifically market risk and volatility risk. By maintaining a constant risk profile, traders can protect against large, sudden price swings in highly volatile cryptocurrency markets. Failure to rebalance continuously can lead to significant losses, especially during periods of high market stress.


---

## [Delta Exposure](https://term.greeks.live/term/delta-exposure/)

## [Real-Time Portfolio Rebalancing](https://term.greeks.live/term/real-time-portfolio-rebalancing/)

## [Portfolio Rebalancing Cost](https://term.greeks.live/term/portfolio-rebalancing-cost/)

## [Hedging Strategy](https://term.greeks.live/term/hedging-strategy/)

## [Quantitative Finance Applications](https://term.greeks.live/term/quantitative-finance-applications/)

## [Black-Scholes Greeks](https://term.greeks.live/term/black-scholes-greeks/)

## [Delta Hedging Complexity](https://term.greeks.live/term/delta-hedging-complexity/)

## [Delta Hedging across Chains](https://term.greeks.live/term/delta-hedging-across-chains/)

## [Delta Hedging Techniques](https://term.greeks.live/term/delta-hedging-techniques/)

## [Basis Trading Strategies](https://term.greeks.live/term/basis-trading-strategies/)

## [Option Greeks Delta Gamma](https://term.greeks.live/term/option-greeks-delta-gamma/)

## [Delta Hedging Risks](https://term.greeks.live/term/delta-hedging-risks/)

## [Hedging Cost](https://term.greeks.live/term/hedging-cost/)

---

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---

**Original URL:** https://term.greeks.live/area/continuous-rebalancing/resource/2/