In the example below, further information is provided on how a PAMM Account operates.
Susan and Miranda would both like to start generating a profit from trading, however, due to their busy lifestyle and lack of trading experience, it would be much more difficult for them to get started.
Enter, Michael, an experienced and knowledgeable trader who would like to start finding Investors to invest in his fund so that he can trade and manage their funds.
Michael (Money Manager) makes his offer to join his fund as 25%
Susan (Investor 1) deposits $6,000 – 60%
Miranda (Investor 2) deposits $4,000 – 40%
This would mean that a total of $10,000 has been added to the fund.
Let us say that Michael has generated a profit of $2,000 from his trade. The PAMM System will divide the profits made from the trade according to the percentage deposited by the Investors initially. Meaning $1200 (60%) of the profit goes to Susan and $800 (40%) goes to Miranda.
IMPORTANT – Should the trade result in a loss, the same dividing calculation will apply.
When the Money Manager’s performance fee for their offer is actioned, the percentage will be deducted from the profit generated and the rest of the profit is divided accordingly to the investors as previously mentioned.