In this method, the master trader’s trade is divided among investors based on percentages. Each investor gets a certain percentage of the trade, and all percentages must add up to 100%. If an investor does not have a percentage assigned by the master, that investor will not receive an allocation of the trade volume. When all investors have not assigned a percentage, the trade will remain unassigned.
How it works:
- The PAMM manager decides what percentage of the total trade goes to each investor.
- If an investor doesn’t have a percentage assigned, they won’t get any of the trade.
The general formula of the Percent Allocation method is this: Voli = (Pcnti * MVol) / 100%
MVol – volume of the master trade
Pcnti – Percent (%) parameter of the sub-account
Voli – volume of the sub trade
MVol – volume of the master trade
Pcnti – Percent (%) parameter of the sub-account
Voli – volume of the sub trade
Example: The PAMM manager trades 10 lots (units).
- Investor 1 has 40%: They get 4 lots.
- Investor 2 has 30%: They get 3 lots.
- Investor 3 has 30%: They get 3 lots.
The trade is split based on these percentages.