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Copy Trading System Profit Sharing Explanation

XT.COM Team
  • Updated

I. Profit Sharing Settlement Method & Account Structure

1. Custom Copy Trading

  • Pre-deduction Mechanism:
    • When a follower closes a profit position, the system pre-deducts the profit share in real-time based on the trader’s level.
    • Daily settlement at 00:00 (UTC): Based on the follower’s actual daily total profit × profit share rate. The system makes adjustments (refund or supplement) accordingly.
  • Fund Flow:
    • If pre-deducted profit share > actual profit share → the excess is refunded to the follower.
    • If pre-deducted profit share ≤ actual profit share → the difference is paid to the trader.
  • Account Rule: Uses the same balance as the futures account. All operations conducted in the futures account.

2. Smart Copy Trading

  • Pre-deduction Mechanism:
    • Only realized PnL from closed positions is recorded (displayed as pre-calculated profit share, no funds are deducted).
    • Profit Share Formula: Profit Share = (Ending Wallet Balance - Starting Wallet Balance - Net Transfer In - Funding Fees) × Profit Share Rate
  • Settlement Triggers:
  • Scenario
    Settlement Time
    Copy trading relationship ends
    Immediately close positions and settle
    Forced stop-loss on all positions
    Immediate settlement
    No open positions, still following
    Daily at 00:00 (UTC)
    Open positions held
    No settlement

  • Account Rule: Uses the futures account for funds. Trader operations are conducted in the futures trading interface.
 

II. Profit Sharing Rules

  1. Position Association Rule:
    1. All follower positions must be closed before profit sharing can be settled.
    2. Example: If a follower still holds an open position that day, profit sharing is deferred to the next day after all positions are closed.
 
  1. Profit Share Ratio Rule:
    1. Calculated based on the trader’s level at the time of opening the position (remains fixed during the follow period).
      • For example, if a trader is promoted from L1 (12%) to L2 (14%):
        • Old positions use 12%.
        • New positions use 14%.
 

III. Profit Sharing Case Studies

Custom Copy Trading Case:

"Estimated Pending Profit Share" includes: 12% of the profit from previously closed profitable orders and 12% from today's closed profitable orders.
If the closed order yields a positive return, the estimated pending profit share increases; if the closed order results in a loss, the estimated amount decreases.
Users A/B/C/D follow Trader M to open positions in the following contracts: BTC/USDT, ETH/USDT, and BTC/USD.
  • Case 1:
User A follows Trader M and opens a BTC/USD position, earning 0.01 BTC. Before the settlement point, User A closes all positions.
Pre-deducted profit share: 0.01 BTC * 12% = 0.0012 BTC. On the next day, 0.0012 BTC is distributed to the trader. If the exchange rate at the time of distribution is 20,000 USD, the profit share section will show a total of 24 USDT.
 
  • Case 2:
User B follows Trader M and opens three contracts: BTC/USDT, ETH/USDT, and BTC/USD. BTC/USDT earns 300 USDT, ETH/USDT earns 200 USDT, BTC/USD loses 0.01 BTC. Before the settlement point, User B closed all positions.
Estimated deducted profit share: 300 USDT * 12% + 200 USDT * 12% - 0.01 BTC * 12%; if the BTC exchange rate at the time of settlement is 20,000 USD, then the trader receives (36 + 24 - 24) = 36 USDT on the next day.
(Note: 36 USDT = 300 USDT * 12%, 24 USDT = 200 USDT * 12%, the other 24 USDT = 0.01 BTC * 12% * 20,000 USD/BTC)
 
  • Case 3:
User C follows Trader M and opens three contracts: BTC/USDT, ETH/USDT, and BTC/USD. BTC/USDT earns 300 USDT, ETH/USDT earns 200 USDT, BTC/USD loses 0.01 BTC. Before the settlement point, User C closed only the profitable positions, while the loss-making position remains open.
Estimated deducted profit share: 300 USDT * 12% + 200 USDT * 12% = 60 USDT. No profit share is distributed to the trader on the next day.
If User C closes the loss-making position on Day 3, and the BTC exchange rate is 20,000 USD at settlement, then (60 - 0.01 * 12% * 20,000) = 36 USDT. The trader will receive 36 USDT in profit share on Day 4.
 
  • Case 4:
User D follows Trader M and opens three contracts: BTC/USDT, ETH/USDT, and BTC/USD. Before the settlement point, User D has not closed either profitable or loss-making positions. Therefore, no profit share is pre-deducted, and no profit share settlement occurs.

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