How a PAMM account allocates gains and losses
Work through two outcomes for one participant, then see why a cash flow can change the next allocation.
Read articleStart with the copy allocation
In a proportional copy system, a position depends on the amount assigned to the relationship and the platform’s weighting method. Suppose you allocate $2,000 and a new position has a 5% weight. The target amount is $100 before rounding or fees in this simplified example. Check whether the displayed figure represents capital allocated or exposure after leverage.
Distinguish an existing position from a new trade
You may start copying days after the original trader bought an instrument. If a service copies existing positions, yours can open at the market price available when you join. Compare entry dates and check the treatment of positions below the minimum trade size before attributing a difference in returns to execution quality.
Measure the execution difference
Slippage is the difference between a requested or trigger price and the actual fill. Suppose a purchase of ten units fills at 50.10 instead of 50.00. The extra cost is one dollar before charges. A fill at 49.90 would save one dollar. Market prices and available volume can change while an order is being processed.
Read the fills side by side
Compare the instrument, side, timestamp, executed size and price in the two records. Include deposits, withdrawals or manual changes that affected the amount assigned to copying. Those details usually tell you more about a particular discrepancy than comparing the accounts’ month-end returns alone.
