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Screenshot of a breaking news alert e-mail from Q2 2017
Social trading expert eToro today announces the launch of a new feature, which the company expects to be a real game changer.
The addition is called Copy Dividends and means that from now own, copiers get to enjoy the profits of the traders they are copying while copying them (as opposed to enjoying it once the copy relationship has ended).
How will it work?
Each time a trader withdraws money from their account, the proportional amount of a copier’s money will be taken out of their copy balance, and moved to their account balance.
Here is an example:
A subscriber has invested $1,000 in following a certain trader that has $10,000 in their account, and after a while the trader gets their account to reach $12,000 and decides to withdraw $2,000. As a result, the subscriber’s copy balance (which started at $1,000 and has now reached $1,200) will be deducted of $200 that will be allocated back to the subscriber’s account balance.
The funds will be allocated immediately and in parallel to the withdrawal confirmation. In addition, when the trader one is copying adds funds to their account, the copier will get a notification about that, in case they would like to maintain the same copy proportions as before.
There are some rare cases in which the Copy Dividend feature will not allocate money back to copier’s account balance. In order to protect the copy relationship and not to risk any funds a copier has left as unrealized equity, the dividend mechanism will calculate their new CSL (Copy Stop Loss) – the one that will be set after the allocation – before actually allocating money back to their balance. Should the new CSL will be too close, the funds will not be allocated, in order to cut a copier’s chances of hitting the new CSL.
You can view the full announcement from eToro by clicking here.