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How to adjust trading positions when a Follower makes fund assignments or revokes

HOW TO ADJUST TRADING POSITIONS WHEN THE INVESTOR MAKES FUND ASSIGNMENT OR REVOCATION

The Master should monitor the volume of all open positions on a PAMM Account. The Master sees an assignment/revocation request as soon as it is made by the Follower. Thus the Master has some time to assume the measures before the request is executed at Rollover. Below you can see the examples of positions adjustment after a funds assignment/revocation.

POSITION ADJUSTMENT AFTER FUND ASSIGNMENT

Exposure Level on a PAMM Account is 50% (for example, Equity equals 10,000 USD, Margin equals 5,000 USD). Then 10,000 USD are added to the account, exposure level reduces to 25% (Equity equals 20,000 USD, Margin equals 5,000 USD). In order not to lose profit the Master should increase the exposure level to 50% by opening more positions of the corresponding volume (Equity equals 20,000 USD, Margin equals 10,000 USD).

POSITION ADJUSTMENTS AFTER FUND REVOCATION

Exposure Level on a PAMM Account is 25% (for example, Equity equals 20,000 USD, Margin equals 5,000 USD). Then 10,000 USD are revoked from the account, the exposure level increases to 50% (Equity equals 10,000 USD, Margin equals 5,000 USD). To avoid Stop Out, the Master should reduce the exposure level to 25% by closing positions of the corresponding volume (Equity equals 10,000 USD, Margin equals 2,500 USD).

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