2026-09-05

The high-water mark: what a copy trader's fee actually charges

A trader you copy sets their own fee, from 0 to 30%, and it is charged on profit only. That sentence hides all the difficulty: profit measured how, from when, and what stops your own deposit from looking like their performance. The answer is the high-water mark, and it is worth understanding before you follow anyone.

The problem it solves

Deposit 1,000 USDT into a copy relationship and its net asset value doubles without a single trade happening. A naive fee would look at the jump and charge you a percentage of your own money. That is the classic error: confusing flow — money you moved — with performance — money the strategy made.

The three lines

Before any comparison, the mark is equalised by the flows of the period:

adjusted mark = max(0, mark + deposits − withdrawals)
profit        = max(0, NAV − adjusted mark)
fee           = profit × the trader's rate

Your deposit raises the mark by exactly what you deposited, so it produces no profit and no fee. A withdrawal lowers it by exactly what you took, so what remains is not suddenly "new" gains. The fee only exists when the NAV goes above a mark that has already been corrected for everything you moved.

The part that protects you most

A loss never lowers the mark. Only flow moves it down.

If the strategy is down 20% and then recovers 20%, you are back where you started — and you pay nothing, because the NAV has not passed the old mark. Without this rule a bad month would be quietly forgiven and the fee would be charged all over again on the recovery, which is not new profit. It is your own losses being sold back to you.

What counts as NAV

Balance, realised PnL, unrealised PnL, funding paid or received, and explicit accounting adjustments — minus the venue's trading fees and the house's fees. Deposits and withdrawals are deliberately not in this list: they are flow, and flow belongs in the mark, not in the performance.

Why each leader gets their own account

Copying is sized against your balance — so if several leaders shared one balance, three things would break at once, and only one of them is obvious:

Each relationship would read the same equity, so copying N leaders would mean N times the exposure you intended.
Leader A long BTC and leader B short BTC would net to zero, while both relationships reported themselves as positioned.
The mark compares the NAV of the relationship. On a shared balance, a deposit you made to trade by hand would enter as that leader's profit — and you would pay a performance fee on your own money.

So the unit of capital is the relationship, and the account is too. One account per leader you follow.

Before you follow someone

The rate that applies is the one you accepted when you followed — read it, and remember it is on profit above the mark, not on volume and not on balance. And a copied position is still a leveraged position in your name: everything in Isolated or cross and the mark price applies to it exactly as it would if you had opened it yourself.

Measured on 2026-09-05 against the copy-trading engine in production. Nothing here is investment advice — past performance of any trader says nothing about the next trade. Read the Risk Disclosure.

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