Reallocation on deposit and withdrawal

Learn how the reallocation method works on PAMM accounts, redistributing open positions during deposits and withdrawals based on equity proportions across subscribed accounts

On each deposit and withdrawal operation, open positions on a PAMM master account are reallocated to PAMM investment accounts subscribed to it, in proportion to equities.

Example

Consider PAMM investment accounts #1 and #2 that are subscribed to a PAMM master account:

Balance on PAMM master account = 0

Balance on PAMM investment account #1 = 0

Balance on PAMM investment account #2 = 0

Step 1: Investor #1 transfers 1,000 USD to the PAMM investment account #1.

During rollover, a transfer is made.

‍Result: The balances on both the PAMM investment account #1 and PAMM master account have increased by 1,000 USD.

Step 2: The PAMM trader opens a EUR/USD position for buying 1 lot at the price of 1.1555.

‍Result: This position has been reallocated only to the PAMM investment account #1 (because this account has a positive balance) in the following volume:

Position volume for Investor #1 = 1 lot * 1,000/1,000 = 1 lot

Step 3: EUR/USD is now traded at the price of 1.1600.

‍Result: The account equities have changed as follows:

Equity of PAMM master account = Equity of PAMM investment account #1 = 1,000 + 1 lot * (1.1600 - 1.1555) * 100,000 = 1,450

Step 4: Investor #2 transfers 550 USD to the PAMM investment account #2.

During rollover, a transfer is made.

‍Result: The balances on both the PAMM investment account #2 and PAMM master account have increased by 550 USD.

Balance of PAMM master account = 1,000 + 550 = 1,550

Balance of PAMM investment account #2 = 0 + 550 = 550

The open position on the PAMM master account is reallocated to both the PAMM investment accounts #1 and #2 in proportion to equities.

For this purpose, the open EUR/USD position for 1 lot on the PAMM investment account #1 has been closed at the current market price (1.1600).

Profit from 1 lot closed (for PAMM investment account #1) = = 1 lot * (1.1600 - 1.1555) * 100,000 = 450

Balance on PAMM investment account #1 = 1,000 + 450 = 1,450

The following volumes are reallocated from the PAMM master account to the PAMM investment accounts #1 and #2:

Position volume for Investor #1 = 1 lot * 1,450/2,000 = 0.73 lots

‍Position volume for Investor #2 = 1 lot * 550/2,000 = 0.27 lots

Step 5: EUR/USD is now traded at the price of 1.1700.

‍Result: The account equities have changed as follows:

Equity of PAMM master account = = 1,550 + 1 lot * (1.1700 - 1.1555) * 100,000 = 3,000

Equity of PAMM investment account #1 = = 1,450 + 0.73 lots * (1.1700 - 1.1600) * 100,000 = 2,180

Equity of PAMM investment account #2 = = 550 + 0.27 lots * (1.1700 - 1.1600) * 100,000 = 820

Step 6: Investor 2 requests to close the PAMM investment account #2 and transfer all funds from this account to the wallet.

During rollover, the request to close the account is executed and a transfer is made.

‍Result: The open position on the PAMM investment account #2 has been closed at the current market price (1.1700).

Profit from 0.27 lots closed (for PAMM investment account #2) = = 0.27 lots * (1.1700 - 1.1600) * 100,000 = 270‍

Balance on PAMM investment account #2 = 550 + 270 = 820

The available amount of 820 USD has been withdrawn from the PAMM investment account #2 to the investor’s wallet. The balance on the PAMM master account has reduced by the amount withdrawn from the PAMM investment account #2.

Balance on PAMM master account = 1,550 - 820 = 730

Balance on PAMM investment account #2 = 820 - 820 = 0‍

The open position on the PAMM master account is reallocated to the PAMM investment account #1 in proportion to equities.

For this purpose, the open EUR/USD position for 0.73 lots on the PAMM investment account #1 has been closed at the current market price (1.1700). Profit from 0.73 lots closed (for PAMM investment account #1)= 0.73 lots * (1.1700 - 1.1600) * 100,000 = 730

Balance on PAMM investment account #1 = 1,450 + 730 = 2,180

The following volume is reallocated from the PAMM master account to the PAMM investment account #1:

Position volume for Investor #1 = 1 lot * 2,180/2,180 = 1 lot

Step 7: EUR/USD is now traded at the price of 1.1650.

Result: The account equities have changed as follows:

Equity of PAMM master account = = 730 + 1 lot * (1.1650 - 1.1555) * 100,000 = 1,680

Equity of PAMM investment account #1 = = 2,180 + 1 lot * (1.1650 - 1.1700) * 100,000 = 1,680