Commission is set by strategy providers as a fee that investors must pay when they make profits.
Commission calculation
Strategy commission is calculated at the end of trading period or when an investor stops copying as follows:
Investment_Commission (USD) = (Equity+sum(Paid_Commission) - Invested_amount) * %commission - sum(Paid_Commission)
where:
- Equity = current investment Equity
- sum(Paid_Commission) = total paid commission till date for the particular investment
- Invested_amount = Investment’s starting balance
- %commission = Commission rate set by the strategy provider
Let us look at an example:
Investment’s starting balance (invested_amount) = USD 1000. Let us assume the strategy provider’s commission is set at 10%.
Profits made at the end of trading period = USD 2000
Current investment equity at the end of trading period (Equity) = USD 3000
Calculated commission = (Equity + sum(Paid_Commission) - Invested_amount) * %commission - sum(Paid_Commission)
= (3000 + 0 - 1000) * 10% - 0
= 2000 * 10%
= USD 200
Thus, the strategy provider will be paid USD 200 as commission and the investment’s updated balance at the end of trading period will be 3000 - 200 = USD 2800.
Now let us look at two scenarios for commission calculation - general and early investment closure.
General scenario:
At the end of a trading period:
- Strategy provider’s orders remain unaffected.
- All copied orders are closed and reopened with the same price (zero spread).
- Profits from copied strategy and equity are used to calculate the commission.
- Commission is deducted from the investment account.
- Calculated commission is credited to the strategy provider’s account.
Early investment closure:
If the Investor decides to stop his investment account before the end of the trading period:
- All copied orders are closed at the current market price.
- Profits from copied strategy and equity are used to calculate the commission.
- Commission is deducted from the investment account.
- Calculated commission is credited to the strategy provider’s account at the end of the trading period
If you have further queries regarding commission calculation, please contact our friendly Support Team.
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