> For the complete documentation index, see [llms.txt](https://ezfi.gitbook.io/ez-finance/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://ezfi.gitbook.io/ez-finance/features/auto-rebalance-vaults/pdn-rebalance.md).

# PDN Rebalance

### Defination

**PDN (Pseudo Delta Neutral) Imbalance Ratio** indicates the deviation of a position from a market-neutral status, **PDN Imbalance Ratio (PIR) is defined as follows:** 

<figure><img src="/files/tlpTNSdM5hV3WGpJllHZ" alt=""><figcaption></figcaption></figure>

where:

* **NSA**: Non-Stable Asset (APT, ETH..)
* **NSA in LP**: the amount of NSA in total position.

Due to the mechanics of Constant Product LP,

* When **PIR is positive**, it means that there are now **more** NSA tokens being held as Debt (**NSA Debt**) than in the LP Position (**NSA in LP**). Since the number of NSA tokens held as Debt only changes due to the borrowing interest rather than its price movements, this implies that the **price of the NSA token has risen** which is why there will be fewer NSA tokens in the LP position.
* If **PIR is negative**, it means the NSA Debt is **less** than the NSA in LP. Similar to the Debt situation above, this implies that the **price of the NSA token has fallen** which is why there will be more NSA tokens in the LP position.


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