An investment amount cannot exceed the strategy’s equity multiplied by the strategy tolerance factor within the strategy.
The total equity limit of a strategy and all investments is 500,000 USD. This includes the strategy provider’s equity plus all other investors’ equity.
Example 1:
A strategy provider's equity is 1000 USD in a strategy, while the total equity of the strategy is 50,000 USD, with a strategy tolerance factor of 3.
- First, check the strategy’s equity multiple by the strategy tolerance factor.
- 1000 USD x 3 = 3000 USD
- Second, calculate the total equity limit of a strategy minus the total strategy equity.
- 500,000 USD - 50,000 USD = 450,000 USD
Between these two values, the lowest value of 3000 USD is the allowed maximum investment.
Example 2:
A different strategy provider has their equity at 1000 USD, but the total strategy equity is now at 498,000 USD, with a strategy tolerance factor of 3.
- First, check the strategy’s equity multiple by the strategy tolerance factor.
- 1000 USD x 3 = 3000 USD
- Second, calculate the total equity limit of a strategy minus the total strategy equity.
- 500,000 USD - 498,000 USD = 2000 USD
Now, between these two values, the lowest value of 2000 USD is the allowed maximum investment.