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PAMM Account

Zara FX is a leading Forex broker, providing traders access to the Global Forex market through the powerful platform.

Percent Allocation
Management Module

PAMM accounts provides all your traders to
run their own investment funds.

Account type in manager's app is called
01
Cash Manager
(For Master)
02
Cash Investor
(For investor)

In investment platform for MT4 second PAMM account type is available: Fund Manager & Fund Investor

Dowload Differences of PAMM

Main Features

01
All investment accounts are combined in one big trading account (master account = pamm account).
03
All investors get share of PnL made on PAMM account proportionally to sizes of their accounts.
02
Only money manager can trade on PAMM account. Trading is disabled for investors.
04
All investors get share of PnL made on PAMM account proportionally to sizes of their accounts.
05
Can work as social investment tool with money managers shown in leaderboard and as institutional invesment tool (MAM) when broker subscribes investors to master accounts
07
No need to close master positions during subscriptions / unsubscriptions / deposits or withdrawals
06
Automated rollovers for deposits and withdrawals
08
Fees for all investors can be set up separately
09
Automated subscriptions / unsubscriptions of investors
11
Investors can see their performance and current equity including floating PnL of their investment accounts in web interfaces.
10
Investors can not see any opened positions in their MT5 terminal.
12
All PnL is distributed to invesment accounts with 0.01USD/EUR/GBP precision (min available part of base currency of investment account)

Allocation of positions in PAMM Accounts

01
Master account (PAMM account) consists of investment accounts (Equity of PAMM account = sum of equities of investment accounts).
02
Only Money manager can trade on master account.
03
When money manager makes trades they doesn't appear on investment account.
04
When money manager closes positions investors get balance operations with their share of PnL for that position.

Formula for calculation of PnL for
investment account:

PnL of investor = Closed PnL for master position x (Investor's Equity / Master’s Equity)

Step's we follow

01

Master opens BUY 1 lot EURUSD @1.2110. Nothing is opened on investment accounts.

02

Master opens BUY 1 lot EURUSD @1.2110. Nothing is opened on investment accounts.

03

03 Investor #1 gets balance operation with 10USD. Investor #2 gets balance operation with 20 USD profit. Investor #3 gets balance operation with 70USD profit.

Behavior of PAMM accounts during
Deposits / Withdrawals

When somebody makes Deposit/Withdrawal (DW) shares of investment accounts are recalculated accordingly to new shares of investment after DW. After DW lblin label creates for all opened positions on master account and all floating PnL for all master positions is redistributed by balance operations to investment accounts.

Example : Initial state: Master account = 1000USD. it has only 1 investor with 1000 USD.

Step's we follow

01
Master opened BUY 1 lot EURUSD @1.2110.
02
Investor #2 subscribed and deposited 2900 USD when EURUSD was @1.2120.
03
Investor #1 got balance operation with floating PnL at the moment of DW: +100USD
04
Master closed position @1.2110.
05
Investor #1 got a balance operation with his share of PnL between DW and closing of position: -27,5 USD (-100USD x (1100/4000). Investor #2 got his share of PnL: -72,5USD

Additional options of
Execution

01
Autocorrection of master positions
on Withdrawals
02
Deposits without rebalancing of
positions

How autocorrection
works :

Autocorrection helps money manager to automatically save same leverage (or margin level) on his account as before withdrawal by partial close of opened positions.

For example

we have PAMM account (4000USD) with 2 investors: 1000USD (25%) and 3000USD (75%). He has 1 lot EURUSD opened position.

Then investor #2
withdraws 2000USD.

Before withdrawal investor #1 had virtual position: 0.25 lot EURUSD and investor #2 0.75 lots respectively.

With Autocorrection

01
Master position will be partially closed by autocorrection proportionally to withdrawal amount >>> 2000USD/4000USD x 1 lot >>> 0.5 lots will be closed.
02
So after withdrawal investor #1 will get same size of virtual position: 0.25 lot same as investor #2 (they have same equity).

Without Autocorrection

01
positions of money manager will not be affected but investors will get new shares in PAMM after withdrawal: investor #1: 50% and investor #2: 50%.
02
So both investor #1 and investor #2 will get 0.5 lots of EURUSD after withdrawal.
That means that leverage for investor #1 increased by 2 because of actions of investor #2.

We implemented rollovers to eliminate such surprises because of withdrawals or deposits even on model without autocorrection.

Money manager can set a schedule for deposits and withdrawals, so he knows when exactly will be executed DW requests and how much money investors plan to deposit and withdraw.

He can make set a schedule for rollovers in settings of master account in his account settings in Web UI.

Deposits without
Re-Allocation of positions

For example : we have PAMM account (4000USD) with 2 investors: 1000USD (25%) and 3000USD (75%). He has 1 lot EURUSD opened position.

then investor #2 deposits 4000USD.

Before deposit investor #1 had virtual position: 0.25 lot EURUSD and investor #2 0.75 lots respectively.

After a new deposit of investor #2 their virtual positions will not be changed. Investor #1 will have same 0.25 lots and Investor #2 will have 0.75.

It is highly recommended not to use that
feature because of 2 side effects

01

Performance of master account will be different from performance of investment accounts (as positions were not rebalanced)

02

Master account will have bigger margin level then investor #1, so investor #1 can hit stop-out earlier than master.

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