Premium leader fees are additional fees that are charged for following a leader. Each leader has the option of charging these extra fees for following one of their portfolios.
These additional costs are not included in the price of a Shrimpy subscription. As a result, we recommend carefully evaluating premium leaders before deciding to follow.
The premium leader fees are charged by Shrimpy on a monthly basis. The two different types of fees that leaders can charge include "Performance Fees" and "Assets Under Management Fees".
Definition: Performance fees are calculated by evaluating how much money was earned while following a specific leader. The leader is paid based on a percentage of the total amount of money the leader earned for the follower.
This system means followers will only pay the leader when the leader actually earns money for the follower. If the followers didn’t earn any money, the leader doesn’t get paid.
Performance is calculated by continuously looking at the amount of money that was earned by a portfolio while following the leader. Based on the amount of money that was earned, the leader will get a percent cut.
Assets Under Management (AUM) Fees
Definition: Assets Under Management is the total value of the funds that are being managed by a leader. AUM is calculated by summing the value of each individual portfolio that is following the leader’s strategy.
In Shrimpy, the AUM fee is charged on a monthly basis. That means if the leader has decided to charge a 1% AUM fee, the follower must pay 1% of their portfolio value each month to the leader.
Due to rapid fluctuations in the market, a single portfolio can experience a large change in value over the course of a month. As a result, Shrimpy will automatically track the value of each follower portfolio continuously. Throughout the month, countless balance data points will be stored and used to calculate the effective AUM for payments.
Flat Dollar Fees
Definition: Flat dollar fees are a monthly subscription cost applied to traders that follow a leader's portfolio.
In Shrimpy, a flat dollar fee can range from $1 to $1,000 per month. These fees are prorated to the amount of time that a trader follows a leader. The charges are also applied for each portfolio that a trader uses to follow the leader. That means if a trader follows a leader with a $5 per month fee with 2 different portfolios, they will be charged $5 per portfolio. Essentially, the cost would be $10 per month for following both portfolios.
When viewing a leader, the AUM and Performance fees can be found in the top section of the leader profile. If there are no AUM fees or Performance fees specified, that means the leader does not charge those fees.
Other useful Links: