CFD Contract Copy Trading Product Overview ｜ Gate

Basic Logic of CFD Contract Copy Trading

The CFD contract copy trading mechanism replicates trades based on the ratio of total assets.

Calculation Formulas

1. Opening a position: Copy trader's order size = Copy trader's copy trading account equity / (Lead trader's copy trading account equity + Lead trader's order fee) × Lead trader's order size
2. Partially closing a position: Copy trader's partial closing size = Size closed for the lead position / Total size of the lead position × Copy trader's total size for that position
3. Closing a position: The copy trader follows the lead trader in closing the position at market price.

Examples

1. Opening a position
   A CFD contract lead trader has account assets of 10,000 and opens a position of 1 lot, with a fee of 6. After the order is completed, the lead account equity is 9,994. The copy trader has account assets of 5,000.
   Copy trader's order size = 5000 / (9994+6) * 1 = 0.5

2. Partially closing a position
   A CFD contract lead trader currently holds a position of 1 lot and partially closes 0.2 lots. The copy trader follows with 0.5 lots.
   Copy trader's partial closing size = 0.2 / 1 * 0.5 = 0.1

3. Closing a position
   If a CFD contract lead trader fully closes a position, the copy trader will also fully close the corresponding copied position.

Special Scenarios

1. Due to minimum order size limits:
   • When the system's minimum order size is 0.01 lots and the calculated copy trader order size is 1.111 lots, the system will round down and place an order for 1.11 lots;
   • When the system's minimum order size is 0.1 lots and the calculated copy trader order size is 1.111 lots, the system will round down and place an order for 1.1 lots;
   • When the system's minimum order size is 1 lot and the calculated copy trader order size is 1.111 lots, the system will round down and place an order for 1 lot;

2. Due to maximum order size limits:
   • When the system's maximum order size is 10 lots and the calculated copy trader order size is 20 lots, the system will round down and place an order for 10 lots;

Common Copy Trading Failure Scenarios

1. When the copy trader's copy trading funds < the lead trader's lead trading funds, if the lead trader places an order for 0.01 lots, the copy trader's calculated opening size based on the total asset ratio will be less than 0.01 lots (0.01 lots is the minimum position size). Therefore, the copy trade will fail;
2. When the copy trader's margin ratio <= 100%, and the lead trader opens another position after making a deposit, the copy trade will fail;

CFD Contract Profit-Sharing Logic

As a Gate CFD contract lead trader, you can earn a percentage of the net profits generated by copy traders. This profit-sharing mechanism is calculated according to the High-Water Mark (HWM) principle for copy trader PnL.

Profit-Sharing Mechanism: High-Water Mark (HWM) Method for Copy Trader PnL

• Profit sharing is determined by the copy trader's cumulative net PnL (including the sum of realized and unrealized PnL) during the copy trading period and is calculated based on the high-water mark principle;
• Profit sharing is only triggered when the copy trader's cumulative net PnL exceeds the recorded highest net PnL;
• If losses occur during lead trading, the lead trader can only become eligible for profit sharing again after fully recovering those losses;
• A new high-water mark is established only when cumulative net PnL exceeds the previous high-water mark. This ensures that lead traders receive profit-sharing rewards only when they continue generating profits for copy traders;

Calculation Logic

• Cumulative net PnL during the period = Total realized PnL since copy trading began + Current total unrealized PnL - Cumulative fees + Cumulative overnight fees + Dividends;
• Copy trader PnL eligible for profit sharing = Cumulative net PnL during the period - High-water mark when profit sharing was last triggered;
• Profit sharing is calculated only when the “copy trader PnL eligible for profit sharing” > 0. Otherwise, no profit sharing is calculated;
• Profit-sharing amount for the copy trader during the copy trading period = Copy trader PnL eligible for profit sharing * Profit-sharing ratio;
• The total profit-sharing amount to be transferred to the lead trader is the sum of the profit-sharing amounts from all copy traders under that trader;

Example

CFD Contract Core Metric Calculations

PnL

1. Calculation Formula
   PnL during the period = Current assets – Cumulative deposits during the period + Cumulative withdrawals during the period – Assets at the beginning of the period

2. Example
   Current assets are 150, assets seven days ago were 100, cumulative deposits during the period were 20, and cumulative withdrawals during the period were 10. The 7-day PnL is:
   7-day PnL = 150 – 20 + 10 – 100 = 40

Rate of Return

1. Calculation Formula
   Rate of return = (Ending assets – Cumulative deposits during the period + Cumulative withdrawals during the period – Beginning assets) / (Beginning assets + Cumulative deposits during the period)

2. Example
   Current assets are 150, assets seven days ago were 1 00, cumulative deposits during the period were 20, and cumulative withdrawals during the period were 10. The 7-day rate of return is:
   7-day rate of return = (150 – 20 + 10 – 100) / (100 + 20) = 33.33%

Sharpe Ratio

1. Calculation Formula
   

Maximum Drawdown

1. Calculation Formula
   Maximum drawdown rate (MDD) = Max[(Historical maximum rate of return – Daily rate of return) / (Historical maximum rate of return + 1)]

2. 7-Day Maximum Drawdown Example
   The maximum drawdown calculated at 12:00 AM on June 8 must use the rate of return at 12:00 AM on June 8 as the starting point. Calculate the drawdowns over the 7-day period from June 1 to June 8 and identify the maximum value.

CFD Contract Copy Trading FAQs

1. Why does the status display as “Copy Trading Stopping” after I stop copy trading?
   Answer: CFD contract markets have market closure periods. When a copy trader holds positions in a market-closed status, the status will display as “Copy Trading Stopping.” Once the market reopens, the system will automatically settle and stop your copy trading.

2. Explanation of field rules in the CFD Stop Copy Trading pop-up
   Margin Balance: CFD copy trading account equity
   Total PnL: Margin balance - Net copy trading amount
   Net Copy Trading Amount: Initial investment + Cumulative additional investments - Cumulative principal transferred out
   Estimated Profit-Sharing Amount: Settled profit sharing + Profit sharing pending settlement
   Estimated Amount Receivable (project level): Margin balance (project level) - Remaining estimated profit sharing pending distribution
   Remaining Estimated Profit Sharing Pending Distribution: PnL of positions not yet subject to profit sharing * Current profit-sharing ratio

3. Q: Will copy trading continue if there is a delay in the opening signal?
   Answer: Copy trading will not continue if the delay exceeds the set threshold (10 seconds).

4. Q: How are delayed position-closing or position-reduction signals handled?
   Answer: They are handled through scheduled checks and an active position-closing mechanism. Checks are currently performed every 3 minutes.

5. Q: Are losses caused by delays compensated?
   Answer: Losses incurred by copy traders due to delayed position openings, as well as related profit-sharing losses affecting lead traders, will not be compensated.

Disclaimer

The content provided herein is for reference and educational purposes only and does not constitute any financial, investment, trading, or legal advice, nor does it constitute an offer or solicitation to buy or sell any digital assets. Gate makes no express or implied representations or warranties regarding the accuracy, completeness, or timeliness of the information contained herein. Product features, interfaces, rules, and fee structures may be updated or adjusted at any time. Please refer to the latest announcements and the actual information displayed on the Gate platform for the most accurate details.
Digital asset investments involve significant risk, and prices may fluctuate substantially. You may lose the entire amount of your investment. Please make decisions cautiously based on your own financial situation and risk tolerance after fully understanding the associated risks. If necessary, you are advised to consult an independent professional financial or legal advisor.
For more information about potential risks, please refer to Gate's Risk Disclosure and User Agreement.