Doing the math

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fordewind

fordewind

Hi, All!

Need an advice from pro trader, trading opm.

Suppose Investor A invested 5K;
Investor B invested 50K;
And Investor C invested 200K.

By the end of the quarter we have a profit of 15K where i take 35% from that profit.Now, how do i equally split the profit amongst the Investors and keep my share?

Thanks.
 
Take 35% of the 15K and that is your profit. Take what's left and divide among the investors based on what percent of capital they put in. Pretty easy.
 
This seems pretty straight forward. Am I missing something here??!

If you take 35% of the profit, then you take 35% * 15K = $5,250 and that leaves $9,750 of profit to be split among the three investors:

Investor A owns 5K / (200K+50K+5K) which is 5/255 = 1.96%
1.96% * $9,750 = $191.18 profit

Investor B owns 50K/255K = 19.6%
19.6% * $9,750 = $1,911.76 profit

Investor C owns 200K/255K = 78.4%
78.4% * $9,750 = $7,647.06 profit
 
Statistical Trader said:
This seems pretty straight forward. Am I missing something here??!

If you take 35% of the profit, then you take 35% * 15K = $5,250 and that leaves $9,750 of profit to be split among the three investors:

Investor A owns 5K / (200K+50K+5K) which is 5/255 = 1.96%
1.96% * $9,750 = $191.18 profit

Investor B owns 50K/255K = 19.6%
19.6% * $9,750 = $1,911.76 profit

Investor C owns 200K/255K = 78.4%
78.4% * $9,750 = $7,647.06 profit
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Thanks, ST for the detailed layout.

Another question , if i may.Suppose the Investor D now joins with 100K.How it goes from there, and, will the latter be a not so good idea for the formers?I imagine the profit will be less now even though the overal fund has grown?

Thank you.
 
fordewind said:
Thanks, ST for the detailed layout.

Another question , if i may.Suppose the Investor D now joins with 100K.How it goes from there, and, will the latter be a not so good idea for the formers?I imagine the profit will be less now even though the overal fund has grown?

Thank you.
More...

It will be easier to add investor D when there are no open positions and just cash in the account.
Everyones percentage share can be easily calculated at that point.
When will that next be?
 
use a NAV system...

Starting NAV: 2.55

A has 1.961 shares
B has 19.608 shares
C has 78.431 shares
Total shares outstanding 100.000

Ending NAV ex fees: 2.70
fees 35% = 0.0525
Ending NAV: 2.6475

That's the price you're new guy would pay per share... if he invests 10k, he buys 37.771 shares.
Total shares outstanding 137.771 shares.

Since it's based on nett assets, there is no dilution... you just buy 38% more of what you had or you trade 38% bigger.

It's easy to get people out or in this way... and pay-out dividends. There are some rounding errors, but that wouldn't be much if you keep 4 decimals.
 
southall said:
It will be easier to add investor D when there are no open positions and just cash in the account.
Everyones percentage share can be easily calculated at that point.
When will that next be?
More...

Quarterly, as will be the report.
 
JackRab said:
use a NAV system...

Starting NAV: 2.55

A has 1.961 shares
B has 19.608 shares
C has 78.431 shares
Total shares outstanding 100.000

Ending NAV ex fees: 2.70
fees 35% = 0.0525
Ending NAV: 2.6475

That's the price you're new guy would pay per share... if he invests 10k, he buys 37.771 shares.
Total shares outstanding 137.771 shares.

Since it's based on nett assets, there is no dilution... you just buy 38% more of what you had or you trade 38% bigger.

It's easy to get people out or in this way... and pay-out dividends. There are some rounding errors, but that wouldn't be much if you keep 4 decimals.
More...

Might be later, perhaps.Thanks for the suggestion!
 
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