Copy Trading Pro: Profit Sharing Explained

Copy Trading Pro Masters on Bybit can earn a percentage of the net profits generated by each Investor who holds a share of their strategy. In return, Investors need to share part of their position profits with their chosen Pro Master.

 

 

 

 

High-Water Mark (HWM) Principle

Pro Masters can set a profit-sharing ratio of up to 30%. Profit sharing is calculated on every 7th day (T+6) of the strategy cycle, based on the latest Net Asset Value (NAV) recorded at 2AM UTC and the applicable profit-sharing ratio.

 

The High-Water Mark (HWM) principle applies, which means profit sharing only occurs when the latest NAV on the calculation date exceeds the previously recorded highest NAV (the high-water mark).

 

The profit-sharing amount is calculated as:

(Latest NAV – HWM) × Profit-Sharing Ratio × Shares

 

The HWM will be updated:

• On the profit-sharing calculation date.

  • If the NAV reaches a new high, the HWM will be updated to the latest NAV.

  • If the NAV doesn't exceed the HWM, the HWM will remain unchanged.

• On the investment date. The new HWM is calculated as:

(Original HWM × Original Shares + New Investment) ÷ (Original Shares + New Shares)

 

The HWM doesn't update at any other time, even if the NAV changes. Therefore, redemptions have no impact on the HWM.

 

 

 

 

Profit-Sharing Settlements

The profit-sharing amount is settled and distributed during the redemption settlement window — at 2AM UTC on T+7. A final settlement also takes place when a strategy is terminated.

 

From 2AM to 11PM UTC on T+6, Pro Masters must prepare both the redeemed funds for Investors and the profit-sharing amount (if applicable). If there are no redemption requests from Investors, but the HWM reaches a new high, Pro Masters still need to prepare the required amount for profit sharing. The realized profit share will then be distributed to the Funding Account of the Pro Master Subaccount on T+7. To learn more about Copy Trading Pro rules, refer to this article.

 

If insufficient funds are available in the Pro Master's account, the system will take over and automatically close some or all positions to cover the shortfall. In this case, the redemption and profit-sharing amounts will be recalculated based on the NAV at 2AM UTC on T+7 instead.

 

Details such as the estimated redemption value and pending profit can be found in the Pro Master Center under Strategy Overview → Strategy Status → Redemption Dashboard.

 

Pro Masters can also change their profit-sharing ratio, but not within 48 hours before the settlement date. Once updated, the new ratio will take effect starting from the second upcoming settlement date.

 

 

 

 

Example

The table below shows an example of how profit sharing is calculated and settled over time.

 

 

 

Day 1:

• The Investor purchases 1,000 shares at an NAV of 1. The initial HWM equals the NAV on Day 1.

• The Pro Master sets a 20% profit-sharing ratio, meaning 20% of the net profit from these shares will be distributed to the Pro Master.

 

Day 3: The HWM is only updated on profit-sharing calculation dates and investment dates, so it remains the same on Day 3 even if the latest NAV has changed.

 

Day 7 (profit-sharing calculation):

• The profit-sharing amount = (1.5 – 1.0) × 20% × 1,000 = 100 USDT.

• The HWM is updated to 1.5.

 

Day 8 (profit-sharing settlement and distribution):

• The profit-sharing amount is distributed to the Funding Account of the Pro Master Subaccount at 2AM UTC.

• The NAV reflects the latest value after profit sharing.

• The HWM remains unchanged.

 

Day 14 (profit-sharing calculation):

• Since the latest NAV is below the HWM, no profit sharing occurs.

• The HWM remains unchanged.

 

Day 16 (additional investment):

The Investor invests another 2,400 USDT. Recalculation will only happen once the investment is confirmed.

 

Day 17 (investment confirmed):

• New shares are calculated based on the latest NAV: 2,400 ÷ 1.2 = 2,000 shares.

• Total shares = 1,000 + 2,000 = 3,000.

• New HWM = (1.5 × 1,000 + 2,400) ÷ 3,000 = 1.3.

 

Day 21 (profit-sharing calculation):

• The profit-sharing amount = (1.5 – 1.3) × 20% × 3,000 = 120 USDT

• The HWM is updated to 1.5.

 

Day 25 (redemption requested):

• The Investor submits a redemption request of 1,000 shares.

• The HWM is not affected by redemptions.

 

Day 28 (redemption & profit-sharing calculation):

• The profit-sharing amount is calculated before redemptions are processed.

• Profit-sharing amount = (1.9 – 1.5) × 20% × 3,000 = 240 USDT

• The HWM is updated to 1.9.

• Redeemed funds after profit sharing = [1.9 – (1.9 – 1.5) × 20%] × 1,000 = 1,820 USDT.

 

Day 29 (redemption & profit-sharing settlement and distribution):

• The Investor receives the redeemed funds of 1,820 USDT, while the Pro Master receives profit sharing of 240 USDT.

• Remaining shares = 3,000 – 1,000 = 2,000.

 

Day 30 (profit-sharing ratio change):
The Pro Master changes the profit-sharing ratio to 30%. The new ratio will take effect on the second upcoming settlement date at 2AM UTC, which falls on Day 43.

 

Day 35: The new ratio hasn't taken effect yet. No profit sharing occurs since the latest NAV is below the HWM.

 

Day 42 (profit-sharing calculation):

• The HWM is updated to 2.5.

• Profit-sharing amount = (2.5 – 1.9) × 20% × 2,000 = 240 USDT.

 

Day 43 (profit-sharing settlement and distribution):

The new profit-sharing ratio of 30% takes effect.

 

Day 44 (strategy termination):

• A final settlement takes place.

• Profit-sharing amount = (2.8 – 2.5) × 30% × 2,000 = 180 USDT

• The HWM is updated to 2.8.

• Redeemed funds after profit sharing = [2.8 – (2.8 – 2.5) × 30%] × 2,000 = 5,420 USDT.