There are a few events which will trigger STRATxAI to automatically add a transaction to your STRATxAI portfolio. These can be summarised as Corporate Actions and they are explained in detail below.
A delisting occurs when a stock is removed from an exchange, this can happen for a variety of reasons including mergers, liquidation, or even lawsuits.
When this event occurs, your broker will automatically sell off the position for you – STRATxAI mirrors this event and adds a sell transaction to your portfolio to keep it inline with your broker.
This means you could have some extra cash lying about in your broker – the next rebalance will fix this and bring your portfolio back up to the number of stocks it is supposed to have.
Note: unusual cases:
In a scenario where you own shares of company B, and B is a child company of A.
If B merges with parent A, in some circumstances you will be issued stock of company A automatically by your broker.
This event, while uncommon, is not mirrored by STRATxAI.
If this event occurs you should sell the parent company A in your broker manually. Rebalance will then bring your portfolio up to date again.
A stock split is when a company increases the number of its outstanding shares to boost the stock’s liquidity. It brings the price of a individual stock down.
When this event occurs, all shares of the stock are automatically sold and then the equivalent dollar amount is repurchased. These two transactions are added to your STRATxAI portfolio automatically.
Other corporate actions may not be tracked by STRATxAI.
Rebalancing will sort most issues out, but if they persist – get in touch and we would be happy to help.
During rebalance your portfolio is compared to the current screen of stocks generated by the strategy algorithm. Stocks are bought and sold to stay in-line with the strategy.
To reduce unnecessary churn (and thus fees) in the portfolio at rebalance, if a stock is within 1.5X the screen, it will remain in the portfolio.
You are using The Stable Dividend strategy and through the strategy you now own 10 shares of AAPL, along with 14 other companies to make up a 15 stock portfolio.
At rebalance AAPL is no longer in the top 15 in the strategy screen but has moved to position 19. In this case you will not sell AAPL.
However, had AAPL moved to position 29, you would have sold out of the stock completely.
How to guides for STRATxAI