Fractional shares vs whole shares rebalancing isn't a binary choice — it's a question of how your execution layer sizes each order. The answer changes depending on whether the signal says "buy new position" or "sell existing one."
BUY signals are sized in dollars, not share counts
When a strategy adds a new ticker to its composition, VelaDeck generates a BUY signal. The order is sized by notional dollars: the USD you've assigned to the strategy divided by the number of holdings in that strategy.
If you've allocated $2,000 to DOW10 (10 holdings), each BUY is a $200 notional order. Alpaca fills it as fractional shares — you get exactly $200 worth of the ticker, whatever that works out to in whole and fractional units.
This matters because the alternative — buying the nearest whole-share quantity — introduces systematic drift. At $200 notional, a stock trading at $180 would get you 1 full share and leave $20 uninvested. A stock at $210 would leave your signal unfilled entirely. Fractional execution means $200 stays $200, and every ticker gets its proportional slice.
SELL signals use your actual position quantity
SELL works differently. When a ticker leaves a strategy composition, VelaDeck emits a SELL signal using your current held quantity rather than a notional amount.
This is deliberate: you can only sell what you have. Using your actual position quantity prevents over-selling, which can go wrong in two ways — partial shares being missed in a round-share-only fill, or a fractional lot triggering a compliance hold at the broker. By reading the exact quantity from your Alpaca positions at execution time, the order matches what's actually there.
The quantity-based SELL also handles accumulated fractional positions cleanly. If three months of BUY signals have built up 14.37 shares of a ticker, the SELL order is for 14.37 — not 14.
Fractional shares vs whole shares: where the gap is biggest
For accounts with less capital or strategies with many holdings, the difference between fractional and whole-share execution becomes material.
Take MM20 (20 holdings). At $1,000 allocated, each BUY notional is $50. A stock at $45 would buy 1 whole share with $5 left over — a 10% cash drag per ticker, compounded across 20 positions. With fractional execution, the $50 is fully deployed every time.
Higher-priced tickers make this worse. A stock at $400 is simply unreachable with a $50 whole-share order. Fractional shares are the only way to hold proportional exposure when notional per ticker falls below the stock price.
For larger accounts this matters less — a $100,000 allocation across 20 holdings is $5,000 per BUY, and most US equities are reachable as whole shares at that size. But even at scale, fractional execution is cleaner: it keeps you fully invested without manual rounding decisions.
Equal-weight sizing fills the gap when per-ticker weights aren't published
VelaDeck's strategies are AI-curated compositions. For most of them the individual per-ticker weights aren't published — we see which tickers are in, but not the exact percentage weight each ticker carries.
The practical response is equal-weight sizing: notional per ticker equals `total_allocation / holdings_count`. If you assign $3,000 to IT15 (15 holdings), each ticker gets a $200 notional BUY. This is a reasonable and consistent proxy. Equal-weight has documented properties: it tilts toward smaller-cap holdings relative to market-cap-weight, and every rebalance signal carries the same dollar value — stable and predictable for automation you'll run for months.
A monthly rebalance from signal to fill
Here's what a typical monthly rebalance looks like end-to-end:
- The ingester detects a composition diff on rebalance day.
- New tickers emit BUY signals, each sized at `allocation / holdings_count` in notional USD.
- Departed tickers emit SELL signals, using the exact current quantity from your Alpaca positions.
- The executor posts both to Alpaca. Alpaca fills BUYs as fractional shares and SELLs against your held quantity.
- Fill confirmation (`filled_avg_price`, `filled_qty`) comes back from Alpaca and updates the order record on the dashboard.
This flow is identical in paper and live mode. The only difference is which Alpaca API endpoint receives the orders. See the [strategies page](/strategies) for which strategies rebalance monthly versus quarterly.
VelaDeck does not custody funds — money stays in your Alpaca account throughout. Live trading is opt-in and off by default; see [how to move from paper to live trading safely](/blog/paper-to-live-trading-safely) when you're evaluating that step.
How exactly is notional per ticker calculated?
It's `total_USD_assigned_to_strategy / holdings_count`. Assign $2,000 to US20 (20 holdings) and each BUY is a $100 notional order. Alpaca fills that as fractional shares at market price. VelaDeck is not an investment advisor and makes no claims about execution quality — actual fills depend on Alpaca's market access and the liquidity of each ticker.
What if the stock price is higher than my per-ticker notional?
Alpaca handles it. A $100 notional order for a stock at $250 results in 0.4 fractional shares. You're fully invested at $100 — you just hold a sub-share quantity. Alpaca supports fractional execution on market orders for most US equities without any extra setup.
Does SELL use notional or quantity?
Quantity. VelaDeck reads your current held quantity from Alpaca at execution time and sells the full lot. This prevents over-selling and correctly handles accumulated fractional positions. Historical simulated performance shown on the dashboard does not account for execution costs, cash drag, or partial fills — past simulated returns are not a guarantee of future results.
Can I weight some tickers more than others instead of equal-weight?
Not currently. VelaDeck uses equal-weight sizing across all tickers in a strategy. This is the consistent approach when per-ticker model weights aren't available from the data source. The [strategies page](/strategies) shows each strategy's holdings count so you can size your total allocation accordingly.
Does fractional vs whole-share behavior differ between paper and live?
No. The BUY notional math and SELL quantity logic are identical on paper and live. Paper sends orders to Alpaca's paper API; live sends to the live API. Fractional mechanics work the same on both. To get started with a paper run, [sign up for a free Explorer account](/signup) — paper trading is included at no cost.