Everything you need to know about PAMM accounts

What is PAMM?

PAMM (Percentage Allocation Management Module) accounts allow fund managers to manage multiple trading accounts from a single account, without having to create a separate investment fund. The performance (profits and losses) of a PAMM account manager will be distributed among the managed accounts.

A PAMM account involves the allocation of funds by a client (investor) to another client (trader) who uses the same broker. A single trader (PAMM master) can host up to as many investors (PAMM slaves) as possible.

PAMM leverages their skills and earns extra income. If you are confident about your trading strategy, you can set up your own PAMM fund strategy. This way, you monetize your trading skills, while doing something you love. Your investors will pay a fee every time you make a profit.

How a PAMM account works

Traders in a PAMM account are called fund managers or masters, and investors are called followers/investors/children; they follow their master’s trading strategy or portfolio allocation.

The master has limited power of attorney and can act on behalf of their followers. The master/trader typically gets paid through a performance fee and/or management fee. Each account will be subjected to profit sharing (also known as performance fee), tabulated for each calendar month on the first week of the following month.

A master/trader can simultaneously manage an unlimited number of Investor accounts.

IMPORTANT: PAMM Slaves won't have real-time visibility into their trades; instead, they will experience either profit or loss based on the subscribed trading strategy. Additionally, they retain the flexibility to withdraw their funds at any time.

Key considerations regarding a PAMM account

PAMM accounts are designed to offer flexibility and control:

• In a PAMM setup, clients can unsubscribe from the master strategy at any time via the PAMM portal, and performance fees will be automatically deducted
• Trades viewed by children/investors are delayed
• The PAMM master holds actual cash invested by investors, facilitated by an internal transfer between the master and investor
• If a PAMM investor wants to trade independently, they are free to do so by opening a sub-account