How does a scaling plan affect payout liability?

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Accepted Answer

Scaling increases the balance a trader's percentage returns are applied to, so payouts rise in proportion. A trader making 4% a month on $100,000 earns more in payouts after scaling to $200,000. Liability concentrates in your most successful traders, which your reserve must reflect.
Worked example: a trader with an 80% split earns 4% a month.
On $100,000: $4,000 profit, $3,200 payout.
On $200,000: $8,000 profit, $6,400 payout.
The same performance doubles the cost. If several traders scale at once, monthly payouts can rise faster than sales.
Controls firms use:
A maximum account size per trader.
Scaling only after several payout cycles.
Tighter risk rules on scaled accounts, such as a lower daily loss limit.
Monitoring scaled accounts more closely.
Different rules for scaled accounts are a separate account type. PropExecutor lets several account types share a rule set or use their own, so a scaled tier can carry stricter limits without affecting other traders.
### Monitoring scaled accounts
Review scaled accounts' exposure weekly. A few scaled traders can represent a large share of potential payouts, so they deserve a closer look than the rest of the funded book.

How does a scaling plan affect payout liability?

Detailed answer

Monitoring scaled accounts

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