If this would be possible, there should be some additional rules defined:
My quick brainstorming to that idea:
- The trader must additionally agree that is account can be shorted
- The investor must also agree to special conditions
- The investor has to pay the usual fee of his profits to the losing trader
- The minimum original account size must been paid in originally, withdraws are deducted. If not, the trader cannot be shorted
- There mus be a significantly higher leverage used if the Darwin is shorted than for normal investments in a Darwin
- There mus be a limit on the traders account balance where short positions are closed automatically (like 20% of the original funds of the trader)
- and another limit how much money an investor can use for shorting Darwins (like 10, maybe 15 or 20% of the current value of his investor account, but not more)
- There must be a limit of short investment (like 10 times size of all trader payments to the account deducted by the withdraws)
- There must be defined clear rules how a margin call on the traders account is executed on it and the investor accounts
- short positions mus be closd automatically if the Darwin is downsized to a certain level (like 10 % of the net payments by the trader or a fix value of for example 100 bucks left on the Darwin account where this automated take profit closes the investor position)
I really like this idea, that a losing trader can make some money with his losing account, but he should never be able to control the investors short position. It might help young traers to make experience and some money so that they don`t leave Darwinex forever when the trading money is gone.
The trader should never be able to start a short squeeze on the investor accounts
And it could be very contraproductive if the trader gets significantly more money from investors shorting his account that he would get trying to make profit on his account.