2024-10-29 07:47:54What is Copy Trading Pro?
Copy Trading Pro is a financial product on Bybit that allows users (investors) to invest in strategies created by experienced traders, known as Pro Master. It is a closed-end, periodically open financial product that allows Pro Master to raise funds for their strategies and earn profit sharing from investors’ earnings. Investors can invest in Pro Master by buying shares of the strategy and potentially gain profits without the need to actively manage trades.
Key Advantages
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Broader Opportunities: Copy Trading Pro strategies can encompass a wider range of trading signals compared to individual trading strategies.
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Expert Management: Leverage the knowledge and experience of Pro Master Traders for potentially better returns.
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No Execution Lag: The execution of all trading strategies by the Pro Master Trader will be executed in real-time without lags typical in traditional copy trading.
Key Terms
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Strategy |
A trading plan created by a Pro Master using capital contributed by the trader and investors. |
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Pro Master |
An experienced trader who creates and manages Copy Trading Pro strategies. |
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Investor |
The user who chooses to invest in a Copy Trading Pro strategy. |
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Net Asset Value (NAV) |
The total value of the portfolio of a Copy Trading Pro strategy divided by the number of outstanding shares. |
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Public Strategy |
A Copy Trading Pro strategy that is open for investment to all users. |
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Private Strategy |
A Copy Trading Pro strategy accessible only to a select group of investors (determined by the Pro Master). |
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Min. Master Balance |
The minimum amount of USDT that Pro Master needs to initiate on their own to create a strategy. |
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Strategy Value Cap |
The upper limit of the number of shares under each type of strategy one can apply for. Unlimited strategy value cap only applies to Stable Strategies and Spot-Only trades. |
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Shares |
To participate in a strategy, investors purchase "shares," which represent a portion of the strategy's total ownership and underlying assets. |
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Max. Shares |
This represents the maximum number of shares available for investors to purchase and participate in the strategy. |
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Position Net Value |
It refers to the current value of all positions held by the strategy |
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Seed Round |
It refers to a specific time frame when investors can contribute capital to a strategy created by a Pro Master. The fundraising period for Copy Trading Pro will typically last for 3 days. |
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Lock-Up Period |
The lock-up period refers to the 180-day period in which investors cannot withdraw their capital from the strategy or make changes to their investment amount except during the Subscription & Redemption window on certain days of the week. |
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Investment Window |
An open investment period during which an investor can choose to invest in the strategy. |
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Redemption Window |
An open period during which an investor can choose to redeem the shares in the strategy. |
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Profit Sharing |
An investor’s investment return is directly tied to the NAV per share at the time one chooses to redeem their investment. If the NAV is higher than that at the time of investment, the investor has earned a profit and has to share a percentage of the profit with the Pro Master upon strategy maturity or share redemption. |
Strategy Lifecycle
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Cycle |
Explanation |
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Pro Master Onboarding |
The Pro Master submits an application of strategy, which is vetted to ensure compliance with Bybit Copy Trading Guidelines. |
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Strategy Creation |
A Subaccount dedicated to this strategy is created. The Master Trader deposits funds into the Subaccount. |
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Seed Round |
Investors contribute to the capital of the strategy. The Transfer function of the Copy Trading Pro Subaccount is disabled. |
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Trading (Lock-Up Period of 180 days) |
During this period, the Pro Master can start trading using the pooled assets. |
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Investment & Redemption Windows |
During the lock-up period, investors may continue to subscribe to the strategy or redeem their shares during designated window periods. |
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Settlement Window |
The system will calculate the NAV of the strategy and help investors redeem their shares. |
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Strategy Maturity |
Upon strategy maturity, the systems will calculate each investor’s shares and profit-sharing based on the strategy’s NAV after the lock-up period, and transfer the amount to investors’ Bybit accounts. |
Types of Strategies
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Stable |
Aggressive | |
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Max. Leverage |
5x |
10x |
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Min. Master Balance |
10% |
15% |
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Strategy Value Cap |
Unlimited |
1 million |
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Trade Type |
Spot Only or Hybrid (Derivatives + Spot) |
Hybrid (Derivatives + Spot) |
How it works
Example
Pro Master A creates a strategy with the following details:
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Total Share Limit: 1,000,000 shares
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Trade Style: Hybrid (Derivatives + Spot Only)
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Strategy Style: Stable
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Minimum Master Balance Ratio: 10%
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Minimum Master Balance: 10% of total shares limit = 100,000 shares
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Profit Sharing ratio: 20%
As a result, Pro Master A will need to prepare 100,000 USDT in the Funding Account of his/her Main Account to create the strategy successfully. Assuming the strategy is successfully created and the seed round phase is completed, the strategy details are as follows:
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Shares Purchased during Seed Round: 400,000 shares
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Initial NAV = 1.00
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Raised Funds = 400,000 USDT
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Net Assets for The Strategy = 500,000 USDT (including the Pro Master’s own investment of 100,000 USDT)
The strategy now enters the lock-up period (T-day) with an initial net asset of 500,000 USDT. Assuming Pro Master A has realized 100,000 USDT of profits at T+4 days, the net asset of A’s strategy increases to 600,000 USDT.
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Net Assets |
600,000 USDT |
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Total Shares |
500,000 |
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NAV Updated on T+5 |
600,000 / 500,000 = 1.2 |
During the Investment Window on T+5, Investor B decides to invest 60,000 USDT into A’s strategy. Investor B will be able to confirm the allocated share amount around 2AM UTC on T+6.
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Net Assets |
600,000 + 60,000 = 660,000 USDT |
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NAV at T+5 |
1.2 |
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Purchased Shares |
500,000 |
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B’s Investment |
60,000 USDT / 1.2 = 50,000 shares |
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Total Purchased Shares |
500,000 + 50,000 = 550,000 |
On T+5, Investor C submits a redemption request of 10,000 shares. Investor C needs to wait for Pro Master to prepare the redemption funds on T+6, based on the NAV updated on T+6. Assuming no change in equity, the strategy details on T+6 are as follows:
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Net Assets |
660,000 USDT |
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NAV at T+6 |
660,000 / 550,000 = 1.2 |
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C’s Redemption Funds |
10,000 x 1.2 = 12,000 |
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Redeemed Shares |
10,000 shares |
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Total Holding Shares |
550,000 shares (pending redemption of 10,000 shares) |
On T+7, C’s redemption will be automatically settled. The total holding shares of the strategy is now 540,000 (550,000-10,000).
Profit Sharing
Assume that, after the lock-up period, the position value of A’s strategy increases to 800,000 USDT. The total number of shares is 540,000.
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Net Assets |
800,000 USDT |
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NAV |
800,000 / 540,000 = 1.4815 |
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B’s Shares |
50,000 |
B’s total redeemed amount = 1.4815 × 50,000 = 74,075 USDT
B’s profit sharing with A = 50,000 × (1.4815 - 1.2) × 20% = 2,815 USDT
B’s Net Profit = 74,075 - 60,000 - 2,815 = 11,260 USDT
The example above is for illustration purposes only. For detailed explanations and calculations, please refer to the articles below:
Liquidation Mechanism
When extreme risk is detected, the system will automatically take over the strategy to ensure that investors’ funds are protected and facilitate future redemption requests.
The system takeover happens when:
Case 1: NAV<0.30000, the system will take over and close positions to ensure investors can redeem their shares. OR,
Case 2: MMR≥100%, the liquidation process follows the same logic as the process for UTA.
Risks
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Market Risk: This is the inherent risk associated with any investment in financial markets. The value of the underlying assets in the Copy Trading Pro strategy can fluctuate, potentially leading to losses on your investment.
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Master Trader Performance: The success of your investment depends heavily on the skill and performance of the Pro Master managing the strategy. Past performance is not necessarily indicative of future results, and there's no guarantee the Pro Master will deliver positive returns.
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Limited Control: Once you invest in a Copy Trading Pro strategy, you give up control over the specific trading decisions made. You cannot actively manage the trades within the strategy.
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Strategy Design: The pre-defined trading plan of the Copy Trading Pro strategy may not align perfectly with your risk tolerance or investment goals. Carefully analyze the strategy details before investing.
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Liquidation Risk: If the strategy's NAV (Net Asset Value) falls below a certain threshold for a sustained period, the strategy may be liquidated. This could result in a significant loss on your investment, depending on the remaining asset value at the time of liquidation.
Difference between Copy Trading and Copy Trading Pro
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Copy Trading Pro |
Copy Trading |
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Trading Market |
Spot USDT Perpetuals USDC Perpetuals |
USDT Perpetuals only |
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Roles |
Pro Master and Investor |
Master Trader and Follower |
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Copy Mode |
Close-end strategies where Pro Master fully manages the investor’s fund. |
Follower’s trades are copied based on signals from the Master Trader. |
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Profit Sharing |
0% ~ 30% |
0% ~ 15% |
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Entry Requirement for Masters/Traders |
Pro Masters must provide 10% to 15% as the minimum master balance in their own strategy. |
There is no requirement for the master trader to invest a specific percentage of their own funds to start copy trading. |
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Investors/Followers’ control over their invested funds |
Investors have no control over the invested amount, which will be fully managed by Pro Master. |
Followers can set trading parameters such as leverage, margin mode, take profit/stop loss (TP/SL), and more. |
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Transaction Fee Rate |
The VIP 1 fee rate is applied to all trades conducted in Copy Trading Pro, regardless of your VIP level. |
According to the user’s own VIP level fee rate |
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