When a strategy provider withdraws some of their funds as profit from their strategy, Copy Dividends provide investors with a proportion of that amount as profit as well. Copy Dividends are automatically transferred from the investment account to the investor’s wallet. This allows investors to earn as a strategy provider does, and doesn’t limit these payouts to the end of the trading period or until the investor stops copying a strategy.
Important to consider with Copy Dividends:
- If a loss is reflected, the Copy Dividends will not trigger for the investor.
- Any stop loss or take profit settings changes will be updated after deducting the Copy Dividends (an example of this is provided later).
- Your set alerts will not be updated due to a Copy Dividend.
- Copying coefficient does not change after a Copy Dividend.
The amount of profit provided will depend on how much the investor has invested into the strategy, but for the following example, we will assume that the investor is committing 10% to copy a strategy.
Here’s how Copy Dividends works:
- A strategy provider has USD 1 000 equity within a strategy and a 30% commission rate set. An investor invested USD 100 in this strategy, so his copying coefficient is 0.1 (10%).
- The strategy provider makes a profit of USD 500. This leads to the investment calculating its profit: USD 500 * 0.1 = USD 50. The commission share of 30% is then calculated: USD 50 * 30% = USD 15 as the strategy provider’s commission. USD 50 - USD 15 = USD 35 as the investor’s total profit share.
The strategy provider’s choice to withdraw funds from the strategy account there are two possible Copy Dividends scenarios:
- The strategy provider wants to withdraw only part of their profit from the strategy - USD 200.
- At the time of withdrawal, a Copy Dividend will award the investor with a payout of USD 20 (pending the commission rate of the strategy), which reflects the strategy withdrawal of USD 200 multiplied by the copying coefficient of 0.1.
- The strategy provider wants to withdraw all his profit from the strategy: USD 500.
- At the time of withdrawal, the Copy Dividend will award the investor with a payout of USD 35 (after 30% commission calculations). Since the investor’s share of Copy Dividends is only USD 35 it is not reflected as an exact 10% proportional share.
How do Copy Dividends impact stop loss and take profit?
Stop loss and take profit settings will only be updated after deducting the Copy Dividend. An investor has USD 1 000 as equity, and set stop loss as USD 400 and take profit as USD 1 600. If their Copy Dividend amounts to USD 300 then the stop loss is adjusted to USD 100 and take profit becomes 1 300. Alternatively, if the Copy Dividend amounts to USD 500, stop loss would’ve been deleted altogether while take profit would’ve been set to USD 1 100.