Portfolio Managers and Investors trade at different volumes, so how is this proportionally calculated? That’s what the copy ratio is designed to address.
The copy ratio is the approximate ratio between the equity of the Portfolio Manager’s account within the fund and the investment within the fund. It is used to multiply the lots assigned to orders while copying the orders. The copy ratio calculation is modified based on whether the fund has open orders active or not at the moment the copying starts.
The copy ratio formula used is this:
K = Equity of investment / (Equity of Portfolio Manager’s account + Sum of open orders’ spread cost)
- Equity of Portfolio Manager’s account - equity of the Portfolio Manager’s account within the fund
- Equity of investment - equity of the Investment within the fund
- open orders’ spread cost - total spread (difference between buy and sell price) cost at the moment of the copy action. Current market prices are logged immediately upon the copy action.
When the fund has no open orders, Sum of open orders’ spread cost is set as 0.
The formula has been designed to be as accurate as possible, working transparently so Investors can trade with ease of mind.
Note: In scenarios when a copy ratio is recalculated, the maximum copy ratio is set at 14.
To get a better look at how this copy ratio is used in the copying process, we recommend reading about how copying works.