# 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="https://3802084833-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FfabrnaH7ZKDF0ApfAe8c%2Fuploads%2FHH90RT5Cds9aJZ5pzSeH%2Fimage.png?alt=media&#x26;token=dd90ecd1-099f-417a-8852-57906a440432" 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.