What is Trade Allocation?

a) Trade allocation is done as a percentage of the follower’s Free Margin. It is calculated by dividing the required margin on the newly opened trade of the Leader by their available funds (Free Margin).

b) Calculation: (Leader)

% Allocation = (Required Margin of new trade * 100) / (Free Margin)

The allocation percentage is then reflected on the follower’s account, based on the follower’s available funds (Free Margin) and their account’s leverage.

c) Calculation: (Follower)

Required Margin = % Allocation (Leader) * Free Margin (Follower)

If the required margin to copy a trade on a follower’s account is under the minimum for that asset, the trade will not be copied onto the follower’s account.

Example 1

Leader

1. Buys 5 lots of Gold

2. Required Margin = $10,000

3. Free Margin = $100,000

4. % Allocation = Required Margin x 100 / Free Margin = 10,000 X 100 / 100,000 = 10%

Follower

1. Free Margin = 5,000

2. Required Margin = % Allocation (Leader) x Free Margin (Follower) = 10% x $5,000 = $500

3. The closes lot size which can be opened with this required margin ($486) is 0.06 lots of Gold  System opens a Buy 0.06 lots of Gold

Example 2

Leader

1. Sells 30 lots of EUR/USD

2. Required Margin = $16,000

3. Free Margin = $320,000

4. % Allocation = Required Margin x 100 / Free Margin = 16,000 x 100 / 320,000 = 5%

Follower

1. Free Margin = 2,000

2. Required Margin = 5% x $2,000 =$100

3. The closest lot size which can be opened with this required margin ($100) is 0.18 lots of EUR/USD  System opens a Sell 0.18 lots of EUR/USD