PAMM Account FAQs

A PAMM Account Rollover (which will also be referred to simply as a "Rollover") is a procedure that takes place at the end of each trading hour. During a Rollover, the following things take place:

• The results of trading are recorded.
• The Manager's Remuneration is calculated.
• Fund deposit / withdrawal requests are processed.
• PAMM Account data is updated on the ForexTime site.

There are two kinds of Rollover:

• Active Rollover: During an Active Rollover, remuneration is calculated and paid out to Managers and Partners, deposit / withdrawal requests are processed and statistical data on PAMM Accounts is updated on the ForexTime site.
• Idle Rollover: During an idle rollover, statistical data on the PAMM Account and Managed Accounts is updated on the ForexTime site and remuneration is paid out, but deposit / withdrawal requests are not processed.

The number of Active Rollovers and how often they will occur is determined by the Manager and established in the Request Planner.

Please Note: When funds are withdrawn from a Managed Account, the balance and the equity will decrease by the amount withdrawn, provided the equity is greater than or equal to the balance.

Attention:
There must be at least one active rollover every 24 hours.

A trading interval lasts one calendar month. It is the period of time, after which the results of the PAMM Account Manager’s trading are calculated. At the end of the trading interval, the profit earned on the PAMM Account is divided up among the Investors and the Manager receives remuneration (compensation) from the investors' share of the profits for the month.

Additional Information Regarding Trading Intervals:

1. The starting time of the trading interval is determined based on when the Managed Account is activated (when the first deposit is made).

2. If the date the Managed Account is activated will not occur in the following month, the end of the trading interval and the starting date of the new trading interval on this Managed Account will be the last trading day of the month.

3. If the end date of the trading interval falls on a weekend or a holiday, then the final day and first day of the new trading interval will be the day following the weekend or holiday.
4. The Manager’s remuneration, as stipulated in the Manager's Proposal, is automatically deducted from the Managed Accounts of investors at the end of the trading interval.
5. The exact time the trading interval will end is determined at 12:00 server time (Central European Time) the day before the end date of trading interval. At 12:00, the end time of the trading interval will be fixed as the time of the last active rollover scheduled to take place on the final day of the trading interval in the Request Planner. After 12:00, the Manager will be unable to change the end time of the trading interval by adjusting or canceling active rollovers in the Request Planner.

Managed Account equity is the total value of all Investor assets on the Managed Account at the moment of the last rollover.

Managed Account balance is the sum of all deposits and withdrawals to / from the Managed Account. At the end of each trading interval, after remuneration has been paid out, the Managed Account balance will be equal to the Managed Account equity.

Please Note: When funds are withdrawn from a Managed Account, the balance and the equity will decrease by the amount withdrawn, provided the equity is greater than or equal to the balance.

Please Note: When funds are withdrawn from a Managed Account, the balance will decrease by the amount of the withdrawal. If the equity is less than the balance, the equity will decrease proportionately to the decrease in the balance.

When a Managed Account is closed, all funds will be withdrawn at the current "Share Price" (when the withdrawal request is processed).

Please Note: When the Manager earns a profit during the trading interval, at the end of the trading interval, investors will notice that their number of shares in the PAMM Account has decreased. However, the share price will have risen (See Example 4 below).

PAMM Account Monitoring is a graphical representation of the trading operations that take place on a PAMM Account. Banking operations are not reflected in the Monitoring.

Share shows the Investor’s share in the PAMM Account, or the size of an investor’s Managed Account in relationship to the size of the PAMM Account as a whole.

Share Price reflects the change in equity on the account, taking only the results of trading operations into consideration. The Share Price is the same for all investors (including the Manager) in the PAMM Account. It is equal to the PAMM Account equity divided by the Share Count (or the Managed Account equity divided by the Share Count in the Managed Account Monitoring). The PAMM Account Share Price is recalculated during every PAMM Account rollover.

Share Count determines what percentage of the profits from the Manager’s trading will be will be transferred to each Managed Account. The Share Count for a Managed Account is determined by dividing the Managed Account equity by the Share Price. The Share Count of a Managed Account is calculated during an active rollover when deposit and withdrawal requests are processed.

Share Price and Share Count Monitoring ratings are calculated to the 15th place after the decimal point. To make things easier for our clients, the Share Price is shown in myForexTime to two decimal places and the Share Count to six.

During the next rollover, the PAMM Account Share Price rises to 250.00. The Managed Account equity rises to 1,250 USD (250.00 X 5.00 Shares = 1,250 USD).

The Investor decides to make another deposit to the Managed Account and submits a deposit request for 500 USD. The PAMM Account Share Price at active rollover is 250.00. When the request is processed, 2.00 shares (500 USD / 250.00) will be credited to the Managed Account and the Share Count of the Managed Account will increase to 7.00. At the next rollover, the Managed Account equity will be calculated with 7.00 Shares.

Rate of Return shows the percentage of profit or loss on a Managed Account over a given period of time. This rating is calculated using the following formula:

(P2 - P1) / P1 X 100%

• P1 = Share price at the beginning of the period
• P2 = Share price at the end of the period

(350 – 250) / 250 X 100 = 40%.

You can also calculate the Rate of Return for a period of time using the "Rate of Return" graph in the PAMM Account Monitoring. Use the following formula:

((D2+100)-(D1+100))/(D1+100) X 100%

• D1 = Rate of Return at the beginning of the period
• D2 = Rate of Return at the end of the period

Please Note: In accordance with the Manager's conditions in his Proposal, at the end of the trading interval, the Manager will earn a percentage of the total profit (if a profit was earned) on the PAMM Account as compensation. This amount will be added to the balance of their Managed Account.

The following ratings are used to evaluate a Manager’s performance on a PAMM Account:

• Maximum Relative Profit is calculated as the distance between a low point and a high point following the low point on the PAMM Account Monitoring chart. It is the maximum amount that an Investor could have earned investing in the PAMM Account.
• Maximum Relative Loss is calculated by finding the distance between a high point and a low point that follows the high point on a chart showing the PAMM Account's returns. This is the maximum amount an Investor could have lost investing in the PAMM Account.
• Maximum Daily Profit is the highest percentage of profit ever earned in one day on a PAMM Account.
• Maximum Daily Loss is the highest percentage ever lost in one day on a PAMM Account.
• Average Daily Profit is the average value of all daily profit recordings (on days when there was a profit), measured in percentage.
• Average Daily Loss is the average value of daily losses (on days where there was a loss).
• Daily Profit Volatility is the average value of all daily profit and loss.
• Recovery Factor reflects the relationship between the current profit and the maximum relative drawdown.
• Aggressiveness of Trading is a rating based on the maximum daily profit and maximum daily loss of a PAMM Account. It ranges from 1 (low) to 5 (high).

PAMM Account ratings are also used in the PAMM Account Monitoring.

A bonus system allows the Manager to attract more investors to their PAMM Account by offering them more favorable terms. The Manager may credit a bonus to an Investor’s Managed Account or to an inactive Managed Account.

This bonus amount will be added to the balance of an investor's Managed Account, but will not impact the Managed Account equity. An added bonus may, however, influence the Investor's Proposal level, the calculation of the Manager’s remuneration and the minimum investment level.

Please Note:
Once remuneration has been credited, it may not be cancelled or returned.

At the end of the trading interval on the Managed Account, there was a profit of 500 USD. The Managed Account balance rises to 2,000 USD (1,000 USD belongs to the Investor and 1,000 USD is the bonus credited by the Manager). The Managed Account equity rises to 1,500 USD (the credited bonus is not included in the equity calculation). Although profit was earned on the Managed Account, the Investor will not pay the Manager remuneration from profit since the equity is lower than the Managed Account balance.

At the end of the second trading interval on the Managed Account, there is a profit of 900 USD and the Managed Account equity rises to 2,400 USD. The total profit on the Managed Account is now 1,400 USD (Equity – Balance). When the Manager’s remuneration from profit is calculated, the calculation will take the bonus into account (Equity – Balance + Bonus). The Manager’s remuneration will be 200 USD ((2400 – 1000 - 1000) X 50%).