Profit-Sharing Rules
Table of Contents
1.Profit-Sharing Rules
For Copy Traders:
- The system calculates the profit or loss for each copied trade order and accumulates it during the settlement period.
- For each profitable order copied, the system deducts fees and a portion of the profit-sharing before settlement on the settlement date.
- If the actual profit due to the Lead Trader is less than the deducted amount, the excess is refunded to the Copy Trader's trading account.
Let's say the profit-sharing ratio for the Lead Trader is 10%, and there are no active positions at settlement.
Total profit and loss generated by the Copy Trader during the settlement period
= 200 - 50 + 300 - 500 + 500 + 100
= 550 USDT
Actual profit-sharing amount for the Lead Trader = 550 USDT * 10% = 55 USDT
Total deducted amount = 200 * 10% + 300 * 10% + 500 * 10% + 100 * 10% = 110 USDT
Amount to be refunded to the Copy Trader = 110 USDT - 55 USDT = 55 USDT
For Lead Traders:
We use a high-watermark method for profit-sharing. When the total profit of the leading trade exceeds the previous highest profit, any extra profit is shared based on a fixed ratio. This can be expressed by the formula:
Profit-Sharing Amount = Max [Cumulative Profit - High Watermark, 0] * Current Profit-Sharing Ratio
Profit-sharing applies exclusively to contracts denominated in USDT.
Case :
Assuming the profit-sharing ratio for the Lead Trader is 10% and there are no active positions at settlement:
Note:
- Profit change: Net profit for the week.
- Cumulative profit: Total realized profit in the copy trading portfolio.
- High watermark: Indicates whether the cumulative profit exceeded the previous profit-sharing instance.
- Expected profit-sharing: Amount to be shared based on the high watermark.
- Already shared: Profit already settled.
In Weeks 2 and 3, the cumulative profit didn't surpass the previous profit-sharing instance, so the pending profit-sharing remains at $0.
2. Preconditions for Profit-Sharing
- Copy Traders cease copying the contract investment portfolio, or:
- Lead Traders close their contract investment portfolio.
3. Provisioning and Settlement of Profit-Sharing
The system will provision profits from each realized gain according to the profit-sharing ratio, accumulating for unified settlement on the settlement date.
The settlement period for the copy trading system is one natural week, with profit and loss calculated from Monday 0:00 (UTC+8) to Sunday 23:59:59 (UTC+8), and settlement occurs every Monday 0:00 (UTC+8).
Please refer to the APP page for accurate details.