When an investor makes a profit, they must pay a commission fee to the respective strategy provider. This commission fee is set by a strategy provider and is calculated at the end of a trading period or when an investor stops copying a strategy.
Commission calculation
The commission paid will be based on this formulae:
Investment_Commission (USD) = (Equity + sum(Paid_Commission) - Invested_amount + Copy_dividends) × %commission - sum(Paid_Commission)
If there is no previously paid commission, the commission formulae will be:
Investment_Commission (USD) = (Equity - Invested_amount + Copy_dividends) * %commission
Note: Results are rounded down.
The formulas can be broken down to better understand the calculations:
| Equity | Current investment equity. |
| sum(Paid_Commission) | Total paid commission paid for all previous trading periods from the creation of strategy. |
| Copy_dividends | A proportion of withdrawn profit from the strategy provider. |
| Invested_amount | Investment’s starting balance. |
| %commission | Commission rate set by the strategy provider at the time of investment opening. |
Note: While a strategy provider can modify the commission rate for a strategy, the new rate is only applicable for new investments; investments already created will not be changed.
Here’s an example:
An investor starts a new investment with a new strategy provider. The investment’s starting balance is USD 500. The commission fee set by the strategy provider is 10%. An investor makes a profit of USD 1 500 and their investment equity at the end of the trading period is USD 2 000.
Calculated commission = (Equity - Invested_amount + Copy_dividends) * %commission
= (2000 - 500) x 10%
= 1500 x 10%
= USD 150
Therefore, the investor’s investment balance will be USD 1850 after paying the commission.
Here’s an example if an investor has previously paid commissions:
The investor’s starting investment balance is USD 1 000 and the commission fee is set at 15%. The investor makes a profit of USD 2000 and their investment equity at the end of the trading period is USD 3000. The investor has previously paid a commission amounting to USD 150. The strategy provider has previously chosen to withdraw a part of their profit from the strategy and a proportionate amount of USD 200 is withdrawn from the investment account.
Calculated commission = (Equity + sum(Paid_Commission) - Invested_amount + Copy_dividends) × %commission - sum(Paid_Commission)
= (3000 + 150 - 1000 + 200) x 15% - 150
= 2350 x 15% - 150
= 352.5 - 150
= USD 202.5
Therefore, the investor’s investment balance will be USD 3 000 - USD 202.5 = USD 2797.5 after paying the commission.
Commission calculation scenarios
A commission calculation can occur under 2 scenarios:
- A general scenario
- An early investment closure
Each scenario follows a distinct set of processes detailed below.
General scenario:
If an investor continues their investment until the end of a trading period:
- The strategy provider’s order remains unaffected.
- All copied orders are closed and reopened with the same price (zero spread).
- Profits from the copied strategy, equity, and copy dividends are used to calculate the commission.
- The commission is deducted from the investment amount.
- The calculated commission is credited to the strategy provider’s Social Trading commission account in the Personal Area (PA).
Early investment closure:
If the investor decides to close their investment account before the end of the trading period:
- All copied orders are closed at the current market price.
- Profits from the copied strategy are used to calculate the commission.
- The commission is deducted from the investment account.
- The calculated commission is credited to the strategy provider’s Social Trading commission account in the PA, at the end of the trading period.
Details of calculated commission and paid per investment are available in the Commission Report found for each strategy in the strategy provider’s PA.
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