Navigating the world of professional copy trading requires a clear understanding of its operational framework. This guide provides a comprehensive overview of the entire lifecycle, from strategy creation and seed funding to the lock-up phase, subscription windows, and termination procedures. Adhering to these guidelines helps both strategy managers and participants engage with the system effectively and manage expectations.
Understanding the Strategy Lifecycle
Before examining each phase in detail, it's helpful to understand the overall timeline. The entire process is anchored by "T," the strategy's official launch date and the start of its lock-up phase. This date is not fixed to a specific day of the week.
All timelines operate in the UTC time zone. The weekly schedule for subscriptions and redemptions is determined by the day "T" lands on. For instance, if "T" is a Monday, the investment window for purchasing additional shares runs from 2 AM UTC Monday to 11 PM UTC Saturday. Redemption requests can be submitted during that same window, with processing and fund distribution occurring on Sunday and Monday, respectively.
Strategy Creation and the Seed Funding Round
Guidelines for Strategy Managers
The journey begins with the creation of a new strategy. Eligible applicants must use their main account to apply for approval as a professional manager. Once approved, the actual strategy is created within a dedicated subaccount.
Setting up the strategy involves defining key parameters and ensuring the required minimum manager's capital is available in the main account's funding wallet. This creation process can typically take one to three business days to complete.
Managers then select a start date for the seed round, choosing from the nearest five available dates. This three-day fundraising period allows outside participants to invest in the strategy for the first time.
Example Timeline
- Strategy Creation Date: June 16, 2024
- Available Fundraising Dates: June 18 – June 22, 2024
- Selected Seed Round Start: June 19, 2024
- Seed Round Period: 12 AM UTC, June 19 – 11:59 PM UTC, June 21, 2024
- Strategy Launch ("T"): 2 AM UTC, June 22, 2024
Strategy Types and Investment Limits
Managers must choose a strategy type, which dictates the trading rules and limits.
| Parameter | Stable Strategy | Aggressive Strategy |
|---|---|---|
| Max. Leverage | 5x | 10x |
| Min. Manager Balance | 10% of total share limit | 15% of total share limit |
| Strategy Value Cap | Unlimited | Often capped (e.g., 1 million USDT) |
| Permitted Trade Types | Spot Only or Hybrid (Derivatives + Spot) | Hybrid (Derivatives + Spot) |
For an aggressive strategy with a 1 million USDT share limit, the manager must contribute a minimum of 150,000 USDT. This capital is locked in for the duration of the strategy's active trading period. Managers can later choose to increase the total share limit, but this requires contributing additional capital proportionally.
Guidelines for Investors
Investors can participate by purchasing shares during the initial seed round or in subsequent weekly investment windows. During the seed round, the Net Asset Value (NAV) per share is set at 1.00, meaning the investment amount converts to shares at a 1:1 ratio.
Investment amounts are subject to minimum and maximum limits set by the strategy manager, typically ranging from $200 to $10,000 for the minimum and $11,000 to $100,000 for the maximum. To explore a platform that facilitates such strategic investments, you can discover professional trading tools.
The Lock-up Phase: Trading and Subscription Windows
The Trading Period
Once the strategy launches, the manager begins trading using the pooled capital from investors and their own funds within a unified trading account. Supported products include spot, USDT perpetuals, and USDC perpetuals trades.
Investors' funds are entrusted to the manager, and the value of their shares fluctuates based on the strategy's performance. The NAV is recalculated and updated daily at 2 AM UTC, reflecting the current value of each share based on the equity in the trading account.
The Weekly Investment Window
After the seed round, the strategy opens for new investments six days a week. The subscription window runs from 2 AM UTC to 11 PM UTC, from day T+0 to T+5 of each weekly cycle.
Investors can subscribe during this window. The number of shares they receive is calculated using the NAV recorded at 2 AM UTC on the day of their investment. For example, an investment of 12,000 USDT when the NAV is 1.5 would yield 8,000 shares. It's important to note that subscriptions will fail if the total number of shares purchased would exceed the strategy's hard cap.
Managers can continue trading as usual during these investment windows, as the incoming capital is processed and added to the trading pool.
Redemption Window and Processing
For Investors: Requesting a Redemption
The redemption window runs concurrently with the subscription window: from 2 AM UTC on T+0 to 11 PM UTC on T+5. Investors can submit redemption requests at any point during this period.
However, the actual processing of all redemption requests occurs later. The amount an investor receives is calculated based on the NAV at 2 AM UTC on T+6. The redeemed funds are then credited to the investor's funding account by 2 AM UTC on T+7.
Shares must be held for a minimum of four calendar days before they become eligible for redemption. The system processes redemptions using a First-In, First-Out (FIFO) method. Once a redemption request is submitted, it is irreversible.
For Managers: Handling Redemptions
Managers see the total estimated redemption amount on their dashboard during the processing phase (T+6). They must ensure sufficient USDT is available in their funding account by 11 PM UTC on T+6 to cover all redemptions. They can raise this capital by closing positions or using available balance from their trading account.
If the manager fails to provide adequate funds manually, the system will automatically intervene. This auto-settlement process involves liquidating a percentage of the strategy's positions to raise the necessary capital. The redemption value for investors in this case is based on the NAV at 2 AM UTC on T+7. In extreme cases where auto-settlement cannot cover the redemptions, the entire strategy may be forced to close.
Strategy Maturity and Final Settlement
A strategy has a default maturity period of 180 days, with final settlement occurring on the 182nd day. Upon maturity, the strategy is typically automatically extended for another 175 days unless the manager opts to terminate it.
At final settlement, all remaining investors receive their share of the net assets—their principal plus any profits or minus any losses. The strategy manager similarly receives their initial capital plus their share of the performance.
Strategy Termination Procedures
Manual Termination by the Manager
Starting from the 5th week of the lock-up phase, a manager can apply to manually terminate their strategy. The application will only be processed if specific conditions are met: there must be no open derivative positions, no non-USDT spot holdings, no active orders, and no unsettled funds.
Once initiated, all investor redemptions are processed at the next scheduled redemption settlement time. Termination requests cannot be processed during an ongoing settlement period.
Automatic Termination by the System
The system will automatically terminate a strategy under two critical conditions:
- The strategy's NAV falls below 0.3.
- The system is unable to fulfill redemption funds even after auto-settlement.
The system may also issue warnings—without immediate termination—for other high-risk scenarios, such as a 24-hour drawdown exceeding 30%, a historical drawdown exceeding 70%, or a dangerously high maintenance margin ratio, provided the NAV remains at or above 0.3.
Frequently Asked Questions
What is the minimum amount needed to start as an investor?
The minimum investment is set by each strategy manager and typically ranges from $200 to $10,000. You must check the specific requirements of the strategy you are interested in before committing funds.
How is the daily Net Asset Value (NAV) calculated?
The NAV is the total net asset value of the strategy (equity in the trading account) divided by the total number of shares outstanding. It is updated once daily, at 2 AM UTC, to reflect the previous day's performance.
When can I get my money out after requesting a redemption?
After you submit a redemption request during the weekly window, the amount is calculated using the NAV set on the following T+6 day. The funds are then deposited into your funding account by 2 AM UTC on T+7.
What happens if the strategy manager’s trading causes large losses?
If losses cause the strategy's NAV to drop below 0.3, the system will automatically terminate the strategy to protect remaining capital. Investors would receive a payout based on the final NAV at the time of termination.
Can a strategy manager stop trading at any time?
A manager can only manually apply for termination starting from the 5th week of the strategy's life. The termination must comply with specific conditions, such as having no open positions or orders, to be processed successfully.
Is there a difference between Stable and Aggressive strategies?
Yes, the key differences involve permitted leverage, the required manager capital contribution, and often a cap on the total size for aggressive strategies. Aggressive strategies allow higher leverage but require the manager to commit more of their own capital.