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MAM (Multi-Account Manager) and PAMM (Percentage Allocation Management Module) are systems that allow a money manager to trade multiple client accounts from a single master account. In a PAMM, profits and losses are distributed based on each investor’s percentage share. In a MAM, the manager has more flexibility to allocate different lot sizes per sub-account. Both are used by professional traders managing client funds.
A fund manager runs a PAMM account with $500,000 from 10 investors. Investor A contributed $100,000 (20% of the pool). When the manager’s trade earns $10,000 in profit, Investor A’s share is $2,000 (20%). After a 20% performance fee, Investor A keeps $1,600.
