How are performance fees calculated?

How are performance fees calculated?

When our bots make successful trades and your wallet balance is on profit, we charge a fee based on the profits you've earned. This fee is called a performance fee, and it's calculated using a pricing model called "based on a high watermark". The model is designed to prevent you from paying fees when investments are underperforming. The performance fee percentage varies depending on the strategy, but it's usually 15%.

Here's how it works:

Your high watermark is determined by the value of the strategy at the time you joined Diamond Pigs and activated your "portfolio management" button. If you have added funds to your wallet in the meantime, we calculate a "weighted average." For those who joined in 2021, the high watermark is based on the values as of January 1st, 2022.

If your wallet is currently at a loss, you will only be charged a performance fee when the value of your selected strategy exceeds your starting level again. Once the performance fee has been established, a new high watermark is set, ensuring that you never pay multiple times for the same profit.

We calculate the performance fee every month when we prepare the invoice for the monthly fees, unless you have withdrawn crypto from your wallet in the meantime (the calculation is then based on any realized profit).

Changing your strategy doesn't affect your high watermark if you're still at a loss, even if you switch between strategies without a performance fee. However, if you're making a profit, it works differently: In that case we calculate the performance fee on the share of the profit that you realised on that strategy at the time of adjustment.

Please note: The performance fee is based on the profit of the selected strategy, not the overall performance of your wallet. Your wallet's performance may be slightly different because we execute trades in each wallet independently, and there may be variations in trade prices due to the trading "spread." We keep track of the spread for each coin and consider the average spread when calculating strategy performance.

    • Related Articles

    • Why do I see my investments level change when I receive the Diamond Pigs monthly invoice and when I pay?

      The investment levels change because the Diamond Pigs fees are included in the performance calculation. Let's start with an example: Your wallet has a value of $10,000 at the start of a month and has reached $11,000 at the end of the month. Initially ...

    • How Staking Affects your Diamond Pigs Trading

      Exchange wallet types overview Every crypto exchange offers different types of wallets, such as: Spot wallet, Staking wallet, Funding wallet, Futures wallet, Earn wallet and more. Diamond Pigs can only trade with the funds that are in your Spot ...

    • Exclude coins

      What is the Exclude Coins feature in Diamond Pigs? The "Exclude Coins" feature on the Diamond Pigs platform is a unique tool that allows users to specify certain coins in their wallet they don't want Diamond Pigs to trade. The 'Exclude Coins' feature ...

    • Why are the bots not too active?

      The Diamond Pigs bots are designed based on a swing trading methodology. They are not designed as day-trading bots and will usually not react to any small correction in the market. The bots powering various active strategies are designed using ...

    • Why shouldn't I switch strategies and/or turn my Management button Off too often?

      Users who are changing their strategies often will achieve worse results in the long run, than users who select one strategy. Here are 2 main reasons why: Each time a strategy is changed, additional trading fees will incur to rebalance the wallet ...