Copy trading: who is paid, and for what

Copied traders are paid on the money copying them, on subscriptions, on the volume copied, or on performance. The EU's securities regulator treats automatic copying as portfolio management. A laboratory study found that the option to copy others makes people take more risk. And I could not find a single regulator, platform or peer-reviewed source that measures how copiers actually do after fees.

How copied traders are paid

The programme terms of the platforms I could open describe several models:

• A share of the money copying you. One platform pays its top tier a monthly amount equal to a percentage of the average assets copying them, 1.5% a year at the top level.
• Subscriptions. One platform lets signal providers sell subscriptions and keeps 20% of the payment.
• Performance, management and volume fees. One platform allows a performance fee on net profit, calculated with a high-water mark, a management fee charged "regardless of the strategy performance", and a volume fee per million of volume copied.
• A cut of order commissions. Germany's BaFin notes that a platform may be paid a commission for transmitting orders "and the trader may also receive some part of this sum".

ESMA's list of what copied traders' pay can be based on includes the "number and value of trades copied" and the "number of followers of their strategy", alongside performance.

Of these, only a performance fee ties the copied trader's pay to whether the copier makes money. Assets under copy, subscriptions, copied volume and follower numbers pay for attracting and keeping copiers.

How regulators see it

ESMA's 2023 supervisory briefing on copy trading says the service "falls under the definition of portfolio management where the order execution is automatic and does not require any further action from the client". It notes that a copied trader "could be paying the firm as a client and be receiving remuneration for maintaining and sharing the trades", which raises conflicts of interest. And it says that in marketing, past performance "should not be the most prominent element of the communication" and should cover the preceding five years.

Germany's BaFin states that offering signal following or social trading, as it describes them, generally requires a licence.

What research shows

• Risk-taking. In a laboratory asset market, telling people how successful others were increased their risk-taking, and letting them copy others directly increased it further. The authors conclude "that copy trading leads to excessive risk taking" (Apesteguia, Oechssler & Weidenholzer, Management Science, 2020). These are lab subjects, not platform users.
• Where the money goes. Across more than 5,300 social-trading portfolios issued as exchange-traded products, investment flows chased past performance, almost only for the best performers, and followed raw returns rather than risk-adjusted returns. More visible traders, and traders who commented actively, attracted more money (Röder & Walter, Journal of Financial Research, 2019). This measures flows, not what copiers earned.

The missing number

How many copiers lose money, and what copiers earn after fees, is not published by any regulator, platform or peer-reviewed study I could find. Until it is, the record of a copied trader is not evidence of how the people copying them did.

Sources: ESMA Supervisory Briefing on copy trading (ESMA35-42-1428, March 2023); BaFin consumer and licensing pages; platform programme terms accessed 12 November 2026, list available on request; Apesteguia, Oechssler & Weidenholzer (2020); Röder & Walter (2019). Every quotation was checked word for word against the source.