How to adjust trading positions when the Investor makes fund deposits or withdrawals
Categorized as:PAMM accounts - Information for Managers
» How to adjust trading positions when the Investor makes fund deposits or withdrawals
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How to adjust trading positions when
the Investor makes fund deposits or withdrawals
The Manager must monitor the volume of all open positions on a PAMM account. The Manager sees a deposit/withdrawal request as soon as it is made by the Investor. Thus the Manager has at least 12 hours to take the necessary steps before the request is executed at Rollover. Below you can see the examples of positions adjustment after a funds deposit/withdrawal:
Position adjustment after fund deposit
Margin level on a PAMM account is 50% (for example, Equity – 10,000 USD, Margin – 5,000 USD). Then 10,000 USD are added to the account, margin level reduces to 25% (Equity – 20,000 USD, Margin – 5,000 USD). In this case in order not to lose profit the Manager has to increase the margin level to 50% by opening more positions of the corresponding volume (Equity – 20,000 USD, Margin – 10,000 USD).
Position adjustments with fund withdrawal
Margin level on a PAMM account is 25% (for example, Equity – 20,000 USD, Margin – 5,000 USD). Then 10,000 USD are withdrawn from the account, the margin level increases to 50% (Equity – 10,000 USD, Margin – 5,000 USD). In this case to avoid Stop Out, the Manager has to reduce the margin level to 25% by closing positions of the corresponding volume (Equity – 10,000 USD, Margin – 2,500 USD).