What is a PAMM Account and How Does it Work?
"PAMM" refers to "Percentage Allocation Management Modul", and it is a form of investment available on our platform. A professional portfolio manager -PAMM Money Manager-, runs a single account, or PAMM Fund, on behalf of numerous investors -PAMM Investors-. Then, based on each investor's percentage investment, the profits or losses are distributed among them. As payment for their services, the PAMM Manager receives a portion of the revenue.
Making trading decisions and controlling the account's overall risk are the responsibilities of the PAMM Money Manager. As a PAMM Investor, you can keep track of the account's performance and withdraw your money whenever you like.
Using a PAMM account to invest can be a convenient way to access professional investment management without having to manage your own accounts. However, it is important to understand the fees and risks involved in this type of investment, and carefully research the PAMM Manager and their PAMM Funds before making a decision.
Let's say a PAMM Money Manager creates a PAMM Fund and sets an offer within this fund (deposit fee is 10%).
- Investor 1 makes an investment of $5400 (60%) in this Fund ($6000 - 10% Deposit Fee = $5400).
- Investor 2 makes an investment of $3600 (40%) in this Fund ($4000 - 10% Deposit Fee = $3600).
This PAMM Fund currently has $9000. PAMM Manager begins trading and earns a profit of $4000, of which 60% ($2400) is allocated to Investor 1 and 40% ($1600) to Investor 2.
- The deposit fee earned by the PAMM Money Manager is $1000.
- The profit of PAMM Investor 1 is $2400.
- The profit of PAMM Investor 2 is $1600.
PAMM Accounts: useful vocabulary
PAMM: Percentage Allocation Management Module. A sort of money-pooling mechanism that can be utilized for trading.
PAMM Investor: Individual or company who delegates investment management to a professional portfolio manager or PAMM Money Manager. PAMM Investors must use their Account ID and Trader Password received via email to join any chosen PAMM Fund.
PAMM Fund: A "pool of funds". A PAMM Fund is a form of investment instrument that enables several investors to combine their funds and delegate investment management to a professional PAMM Money Manager. PAMM Money Manager established the PAMM Fund. The Money Manager is in charge of making investment decisions and is often compensated with a percentage of the profits made.
Offer: a conditional proposal presented by a PAMM Manager when establishing their PAMM Fund for PAMM Investors to invest funds. The offer involves certain fees.
For additional information about fees, kindly click here.
How can I be sure that my investment will result in a profit?
It is essential to remember that trading can result in both wins and losses. Becoming a PAMM Investor does not guarantee a profit. Nash Markets serves as a technical intermediary between the Money Manager and the Investor and accepts no responsibility for any gains or losses.
Before joining a fund and investing in it, an investor should be cautious about the number of funds invested and the Money Manager chosen to carry out their transactions.
What trading platforms are PAMM accounts compatible with?
PAMM accounts can be accessed via MetaTrader 4 and MetaTrader 5. Please keep in mind that once an account has been created on a specific platform, it can only be used on that platform.
Can I open PAMM Money Manager and PAMM Investor accounts?
Nash Markets allows any user to be both a PAMM Money Manager and a PAMM Investor at the same time, by allowing them to invest in their own PAMM Fund.
What currencies do PAMM accounts accept?
The currency of PAMM Money Manager will be USD exclusively.
PAMM Funds can be created in the following currencies: EUR, USD, GBP, CAD, AUD, and BTC.
PAMM Investors are able to open accounts in the following currencies: EUR, USD, GBP, CAD, AUD, and BTC.
What is the leverage available on PAMM accounts?
Since the PAMM Fund account will be used for trading by the PAMM Manager, leverage options are only available on that particular account.
Leverage options for the PAMM Fund account range from 1:50 to 1:500.