Best Prop Trading Firms

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Chika Uchendu
Contributor, Benzinga
June 7, 2024

In this article, we’ll explore the best prop trading firms currently available. With so many options available, it can be challenging to identify the right prop trading firm for your specific goals. If you're new to prop trading, it's essential to understand the benefits these firms offer and determine which ones can best support your trading career.

This list was created by Benzinga researching and reviewing the top prop firms, focusing on the key factors such as funding speed, evaluation process, transparent pricing, real user reviews and more.

Quick Look: Best Prop Trading Firms

Table of Contents

Best Proprietary Trading Firms

With prop firm trading, the key to success is choosing firms that meet specific vital requirements like a low-fees structure, accessibility to a diverse market or tradable assets and trading platforms. The risk contribution, which determines the amount of leverage offered, should be reasonable, and so should the profit split. Benzinga’s top picks below are based on some of these criteria. 

Best Futures Trading Prop Firm: Apex Trader Funding

With Apex Trader Funding you'll trade mini or microcontracts in the evaluation period, and once the evaluation has been passed, you'll move to a funded account. You'll receive 100% of your first $25,000 earned per account with up to 20 accounts active at once and 90% after that, meaning this platform pays the most of any futures prop trading account. You can use Rithmic or Tradovate, and can choose from one of several different accounts that will come with a particular number of contracts, a profit goal, trailing threshold and more. 

Why We Love It: Apex Trader Funding is our top pick for the best prop firm and they help you get into the futures trading space with a funded account that you can qualify for in as little as 7 days. You can enjoy bi-monthly payouts without a limit on the total payout amount. The platform's efficient single-step evaluation provides real-time data for up to 20 accounts concurrently, simplifying risk management. From day one, you have the freedom to trade mini or micro futures contracts without scaling restrictions or daily drawdown limits in both evaluation and funded accounts.

Profit Split:

  • 100% of the first $25,000 and 90% thereafter

What You Can Trade:

  • Futures

Funding Models:

  • Rithmic or Tradovate Plans: Both plans offer eight account options each with starting capital ranging from $25,000 to $300,000, plus a $100,000 static account. All sizes include no scaling requirements, no drawdown, and free Rithmic platform access.

Additional Benefits:

  • Relaxed Trading Rules: Supports various trading styles with flexible rules.
  • Trading Platforms: Rithmic-based platforms like Rithmic and Tradovate, known for user-friendly interfaces and group trade features. 
  • Educational Resources: Free 30-day education course and one-on-one coaching, accessible across devices, including mobile.
  • Accounts: Trade up to 20 accounts simultaneously with a single click, each supported by Tradovate's unique trading platform and data connection separate from Rithmic.
  • Trading Strategies: Utilize tools like Tick Strike for market flow analysis, Markers Plus for automation, ChartPros for simplified trading, and Ninja Suites for accelerated execution.

Pros

  • Considerably cheaper than most other prop firms 
  • They often offer deals, for $18 you can get $50k accounts (normally $37)
  • You are allowed to copy trade up to 20 accounts
  • The high splits after the first payout help you remain in good financial standing as you grow your career
  • Excellent profit split or payout
  • Two payouts per month
  • No total cap on the maximum payout

Cons

  • They have tighter rules than forex props and more consistency rules
  • You can’t flip the account over 20% and can’t trade news
  • Only supports future tradings

Best for Experienced Traders: FXIFY

FXIFY is a proprietary trading firm that offers access to up to $400,000 for those who pass the assessment. With profit shares as high as 90%, you can scale your account up to $4 million. Trading is available on MetaTrader 4 (MT4) or MetaTrader 5 (MT5) and assorted trading platforms through the firm’s partnership with FXPIG. 

Why We Love It: When you trade on FXIFY, commission-free trading is the law of the land, allowing you to access stock indices, forex, precious metals, etc. There are relatively tight spreads, no trading restrictions, customizable leverage and more. FXIFY offers instant payouts, no consistency rules, unlimited trading days and a 125% refund on your assessment fee with your first payout.

Profit Split:

  • Up to 90%

What You Can Trade:

  • Forex, indices, commodities, stocks and cryptocurrency

Funding Models:

  • One-Phase Evaluation: Traders aim to achieve a 10% profit target within 30 days of opening their assessment account.
  • Two-Phase Evaluation: Traders must achieve two distinct profit targets. Initially, 10% of initial balance within 30 days, with the option to extend their assessment period to unlimited days. After the first phase, traders aim for a second profit target of 5% of their initial account balance within 60 days, or opt for unlimited days. Meeting this target grants access to a funded account.
  • Three-Phase: Designed for a lower assessment cost, it mirrors the perks of the One and Two-Phase Programs, with a profit target of only 5% to progress.

Additional Benefits:

  • Commission-Free Trading: Commission-free trading on a diverse range of products, including forex, stock indices, precious metals like gold and silver, and more.
  • Spreads and Leverage: Tight spreads and no trading restrictions, along with customizable leverage options.
  • Automated Trading: Supports automated strategies and Expert Advisors (EAs), provided they are proprietary strategies developed by the trader.
  • Instant Payouts: Convenience of requesting an initial payout after your first profitable trade, a feature not commonly found in other prop firms where traders typically wait 2-4 weeks for payouts.
  • Robust Trading Dashboard: Comprehensive dashboard offering real-time metrics and analytics, including max daily and total drawdowns.
  • Free Trading Tools and Resources: Access Trading Central's tools and resources, such as the Economic Calendar, Featured Ideas, and Technical Insights, providing valuable market analysis and research resources at no cost.

Pros

  • No limits on instruments or position sizes that you trade
  • The excess fee refund helps traders gets off to a good start
  • Because you can access up to $4 million in funding, it’s much easier to grow your accounts
  • Instant payouts on demand are a game changer
  • No consistency rules or trading restrictions
  • Unlimited trading days
  • Expert Advisors (EAs) allowed

Cons

  • The platform could offer more funding with a higher profit split, but it requires quite a lot of scaling up to get the funding you might want

Best for Stock Traders: Trade the Pool

Established in 2022, Trade the Pool prioritizes providing you with robust risk management tools and caters to a diverse range of trading styles, including day trading, swing trading, and professional trading needs. With support for trading stocks and CFDs, the platform welcomes traders of varying experience levels, offering guidance and assistance to inexperienced traders.

Why We Love It: Trade the Pool provides you with unlimited buying power and a 14-day free trial, allowing you to explore opportunities and experience the platform's features risk-free. They offer access to over 12,000 stocks and ETFs, the platform aims to diversify trading options and provide educational resources to enhance users' trading knowledge.

Profit Split:

  • Up to 80%

What You Can Trade:

  • Stocks

Funding Models:

  • Super Buying Power: At a fee of $300, this package offers a 60/40 profit split, with a maximum daily loss (DL) of $700. The maximum exposure is $80,000, and the maximum exposure per trade is 30% of the DL, automatically enforced by TTP's system.
  • Extra Buying Power: For $475, this package provides double the maximum exposure of the Super Buying Power, with a DL of $1,300. It offers a 70/30 profit split in your favor, with a maximum exposure of $160,000.
  • The Ultimate Buying Power: Priced at $1,240, this top-tier package boasts an 80/20 profit split, with a DL of $2,000 and a max drawdown (DD) of $6,000. You must achieve a $12,000 profit target to get funded, with a maximum exposure of $260,000.

Additional Benefits:

  • Trade the Pool Pump: Designed to boost trader confidence, the pump increases your DL and max exposure after five consecutive winning days. The percentage increase varies by package: 5% for Super Buying, 8% for Extra Buying, and 15% for Ultimate Buying.
  • Trade the Pool Dump: Conversely, the dump reduces your DL after five consecutive losing days, triggered after a pump. For instance, after five days of losses with at least 2XDL, your DL steps back to its initial value.
  • Comprehensive risk management: Traders manage maximum daily loss (DL), Risk Per Day (RPD), and max drawdown (DD)
  • Transparent profit target calculation: Three service packages offer 45-day trade period and access to premium resources like Trade Ideas or TrendSpider

Pros

  • Traders are wise to take advantage of the multiple resources offered through Trade the Pool because it helps you learn before you start actively trading
  • The long free trial gives you more than enough time to decide if this is the right platform for you
  • The customer service is outstanding
  • Pricing and challenge requirements are highly reasonable and the platform is extremely user-friendly

Cons

  • While the platform helps inexperienced traders, you need to make sure you’re ready to do this every day before trying to finish your evaluation

Best for Forex, Indices and Metal Traders: The 5%ers

The 5%ers platform offers a gateway into prop trading, allowing you to access forex, metals, and indices trading with minimal barriers to entry. The platform supports MT5 trading and offers profit splits of up to 100%, along with exclusive resources and salary offers on select higher-stakes programs.

Why We Love It: The 5%ers offers a demo account for as little as $95, which allows you to enjoy instant trading access after passing the evaluation, giving you the freedom to develop your own trading strategies without the burden of subscription fees.

Profit Split:

  • Up to 100%

What You Can Trade:

  • Forex, indices and metals

Funding Models:

  • Bootcamp Program: Offers low-cost entry, with fees starting at $95. Completing three challenges with stop-loss orders allows qualification for a funded account, scaling up to $4 million.
  • Instant Funding: Immediate access to trading capital, ranging from $5,000 to $20,000, with potential growth to $4 million. Fast withdrawals allow access to up to 100% of earnings.
  • High Stakes Program: A two-step initiative with industry-leading benefits, including up to 100% profit split, monthly salary options, high leverage, and unique rewards. Ideal for short-term traders seeking significant growth.

Additional Benefits:

  • Trading Platforms: Licensed MetaTrader 5 platform across PC, web, and mobile versions, offering unique features for user convenience.
  • Global Accessibility: Accepts applications from traders worldwide, including United States citizens, distinguishing itself as a prop trading firm rather than a broker.
  • Clear Profit Targets: Regardless of the chosen funding program, The5%ers clearly outlines profit requirements and order restrictions, enabling traders to align strategies with program specifications before committing.
  • Abundance of Resources: Suite of tools to enhance trading performance. The community feature facilitates connections with successful traders for valuable insights and tips.

Pros

  • Funding up to $4 million
  • Flexibility and minimal restrictions on trading styles
  • Because you can take up to 100% of your profits, you are incentivized to learn on this platform and perform well
  • If you are an excellent trader, you could flip this platform into what many would consider “a traditional job”
  • The spreads on EUR/USD are basically $0 during the Euro session
  • Commission are only $4 per standard lot

Cons

  • The lack of trading platform options might be an issue for some traders
  • The various program structures might be complex for beginners

Best for Seasoned and Undercapitalized Traders: Top One Trader

At Top One Trader, accessing forex trading is straightforward. With flexible evaluations and conditions, you can secure up to $200,000 in funding, extendable to $5 million with consistent success. There are no trading day restrictions, allowing weekend and news trading, even with expert advisors.

Why We Love It: Tools like the Economic Calendar aid informed decision-making, while profit payouts are high with bi-weekly payouts and a 100% challenge fee refund. Backed by transparent practices, low commissions and solid customer support, Top One Trader is ideal for traders looking to build their career.

Profit Split:

Up to 90%

What You Can Trade:

  • Forex, indices, commodities and cryptocurrency

Funding Models:

  • 1-Step “Flash” Challenge: Streamlined path to funding with a 10% profit target, managed by a 5% daily loss limit and an 8% maximum drawdown. Traders must adhere to these rules to avoid account closure.
  • 2-Step “Pro” Challenge: Requires traders to achieve an 8% profit target while managing a 5% daily loss limit and a 10% maximum drawdown. Successful completion offers a better standard payout ratio and leverage options.
  • Scaling Plan: Allows for gradual account size increases based on performance. Achieving a 12% total profitability with at least 3% minimum profitability monthly qualifies traders for scaling, where Top One Trader adds 25% of the initial account balance in additional capital, potentially up to $5 million.

Additional Benefits:

  • User-Friendly Platform: Intuitive and easy-to-navigate platform, ensuring a smooth trading experience for all users, whether beginner or experienced.
  • No Daily Loss Limits: Top One Trader does not impose daily loss limits, giving traders more flexibility and control over their trading activities.
  • Support for Various Trading Strategies: Whether you prefer manual trading or automated strategies, the platform supports a wide range of trading styles, including scalping, day trading, swing trading, and more.
  • Bi-Weekly Payouts: Traders can enjoy regular payouts on a bi-weekly basis with an add-on, providing them with consistent income and helping them manage their finances effectively.

Pros

  • Easy evaluation process
  • The range of funding is incredible for traders of all levels
  • No limited trading days
  • Generous payout ratio of up to 90%
  • Fast funding access of up to $200,000 ($5 million via scaling)
  • Competitive leverage of up to 50:1 for forex trading

Cons

  • Doesn't support high frequency trading
  • Doesn’t support copy trading from multiple accounts not owned by you

Best for Instant Funding: Instant Funding

Instant Funding offers flexible evaluations, allowing traders to tailor their approach, no minimum trading days, and weekly payouts with profit splits of up to 90%. Undercapitalized traders can access funding of up to $200,000 initially, with potential scaling up to $1.6 million. With no time limits or daily drawdowns, you can enjoy flexibility, and leverage of up to 100:1 enhances trading opportunities.

Why We Love It: Instant Funding has a goal to simplify access to the forex market by offering an innovative and transparent approach to proprietary forex trading. They provides a user-friendly platform to match all skill levels and provides access to funded accounts effortlessly. The platform also offers robust support and educational resources, with a responsive customer service team available across multiple channels for assistance.

Profit Split:

  • Up to 90%

What You Can Trade:

  • Forex, indices, commodities and cryptocurrency

Funding Models:

  • One-Phase Challenge Models: Single-phase evaluation with relaxed rules. Hit 10% profit target for funding; starts at 80% payout, can rise to 90% with 20% gain over 60 days; flexible trading days, 3% daily drawdown limit.
  • Two-Phase Challenge Models: Step-1 targets an 8% profit, followed by Step-2 with a 5% profit target, both maintaining a 5% daily drawdown limit. Payout begins at 80%, with the potential to reach 90%. There are no time constraints.

Additional Benefits:

  • Smart Drawdown: Limits at 10%, adjusting based on balance gains for optimized risk management and profit potential.
  • Scaling Plan: Qualify with a 10% gain, use 5% of profits to double your account balance, scaling up to $1.6 million.
  • Weekly Payouts: Begin 14 days after the first trade, processed via Rise for quick access to earnings, with a minimum payout of $25.
  • Automated Dashboard: User-friendly interface for monitoring performance, analytics, and payout requests.
  • Account Sizes & Tradable Instruments: Various sizes available, with access to forex, metals, energy, indices, and crypto.

Pros

  • Customer service is responsive and very helpful
  • There are several evaluations you can try
  • No time limits or minimum trading days
  • No daily drawdown on Instant Funding accounts
  • Intuitive automated trader dashboard

Cons

  • There are some restrictions that might cut into your strategy
  • Does not support copy trading and uses of EA from third-party accounts

Best for Undercapitalized Futures Traders: MyFundedFutures

At MyFundedFutures offers a straightforward one-step evaluation process, access to a wealth of trading resources, and expert guidance. Trade on a variety of platforms and earn the opportunity to manage up to $600,000 in capital, with the first $10,000 in profits entirely yours. Profit splits are typically set at 90%, and you'll gain access to esteemed exchanges like CME, CBOT, COMEX, or NYMEX through platforms like Tradovate, NinjaTrader, and TradingView.

Why We Love It: MyFundedFutures provides essential risk management tools, ensuring you can trade with confidence. They offer transparent and affordable fees, competitive payout ratios, and fast withdrawals, you can focus on maximizing your profits. When it’s all said and done, this is the most affordable prop trading platform out there.

Profit Split:

  • Up to 90%

What You Can Trade:

  • Futures

Funding Models:

  • Starter account targets: $3,000 for $50,000, $6,000 for $100,000, and $9,000 for $150,000. Starter plan includes a 10:1 micro mini scaling option but requires an activation fee and imposes consistency and scaling rules.
  • Expert account targets: $4,000 for $50,000, $8,000 for $100,000, and $12,000 for $150,000. The Expert plan offers unlimited withdrawal potential every 14 days without an activation fee, making it more popular. Expert plan does not require an activation fee, consistency rules, or scaling, making it ideal for experienced traders seeking flexibility and advanced features.

Additional Benefits:

  • No Daily Loss Limits: Eliminating daily loss limits and implementing a maximum trailing End of Day (EOD) drawdown of 4% for $50,000 accounts and 3% for $100,000 and $150,000 accounts.
  • No Minimum Trading Days: No minimum trading day requirement allows traders to pass the evaluation efficiently, and there are no maximum trading day limits.
  • Two evaluation models: Starter and Expert, account sizes range from $50,000 to $150,000.

Pros

  • Lucrative profit share — initial profits up to $10,000 beyond the buffer zone are entirely yours
  • Generous 90% profit split
  • Flexible account sizes or fund options up to $150,000 for futures trading
  • With multiple platforms and exchanges, you can easily build a robust portfolio
  • The lack of consistency rules on certain accounts can help you grow your portfolio at your own pace
  • Access up to $600,000 in capital

Cons

  • You may want to trade something other than futures
  • Does not support EA, automated trading strategies or copying

Best for Investors Using cTraders: PipFarm

PipFarm is a funded trading platform using cTrader. They offer fast payouts and a straightforward single-stage evaluation process, you can start trading at your own pace. Get up to $100,000 in funding, with payouts potentially reaching 90%. You can scale up to $300,000. Just remember, PipFarm exclusively uses cTrader. You can trade in various styles like automated trading, news trading, weekend positions and overnight positions.

Why We Love It: PipFarm sets a 12% profit target alongside a 3% daily drawdown limit, allowing you to manage risks effectively. With the option for trailing or static drawdown, you'll have flexibility in your approach. Leverage is set at 1:30 and the platform keeps costs low by avoiding expensive add-ons. Additionally, there's a 1% scaling bonus, providing an extra incentive for growth and success.

Profit Split:

  • Up to 90%

What You Can Trade:

  • Forex, metals, energies, indices and cryptocurrency

Funding Models:

  • Trailing Drawdown Account: Adjusts drawdown limits based on the account balance's highest point reached. To pass, traders must hit the profit target of 12% while adhering to a 12% maximum trailing drawdown and a 3% daily drawdown.
  • Static Drawdown Account: Maintains a fixed drawdown limit regardless of changes in the account balance. Traders must achieve the 12% profit target while adhering to a 6% static drawdown and a 3% daily drawdown.

Additional Benefits:

  • Cutting-edge Trading Technology: Access to cTrader platform, renowned for its robust features and user-friendly interface.
  • Streamlined Evaluation Process: Single-phase evaluation offers simple and flexible rules, you can qualify quickly and access up to $100,000 in seed funding.
  • Flexible Trading Options: Automated trading, news trading and hold weekend and overnight positions.
  • Transparent Platform: Transparent evaluation process and funding structure.

Pros

  • Bi-weekly payouts
  • Diverse range of assets
  • Multiple account sizes and styles
  • No consistency rules
  • Supports diverse trading strategies, including automated trading, news trading as well as overnight and weekend holdings

Cons

  • PipFarm isn't available to traders in the U.S.
  • Little to no educational resources

Best for Prop Traders Looking for a Multi-Asset Platform: The Trading Pit

At The Trading Pit, you can enter the funded trading space with help from up to $5M in funding and up to an 80% profit share. The Trading Pit provides a user-friendly platform for aspiring traders to enter the world of funded trading, offering flexibility and potential for substantial earnings.

Why We Love It: The Trading Pit offers multiple account options, perfect for traders from all walks of life. Plus, with its scaling plans, you can snag funding up to $5 million. They offer robust tools like Squawkbox for real-time market updates and StereoTrader for optimizing your trades.

Profit Split:

  • Up to 80%

What You Can Trade:

  • CFDs, futures, crypto and stocks (coming soon)

Funding Models:

  • Lite: 3 days of trading minimum, 90 day challenge periods, $1,000 profit target.
  • Standard: 3 days of trading minimum, 90 day challenge periods, $2,000 profit target.
  • Executive: 3 days of trading minimum, 90 day challenge periods, $5,000 profit target.
  • VIP: 3 days of trading minimum, 90 day challenge periods, $8,000 profit target.

Additional Benefits:

  • Clear rules: Straightforward trading requirements.
  • Effortless setup: Quick and easy account initiation process.
  • Educational tools: Access resources to enhance your trading knowledge.
  • Prompt payouts: Rapid access to your earned profits.

Pros

  • Fast payout with flexible options
  • The minimum number of days you need to trade is short, helping those who already know how to trade
  • Challenge periods help you spend time learning how to trade and how much profit you can make
  • Profit targets are reasonable and attainable

Cons

  • Prop traders may want to avoid CFDs because of their high level of risk and complexity
  • Relatively new prop firm

Best for Day Traders: FundedNext 

FundedNext stands out with a 15% profit split during the evaluation stages, rewarding traders for their efforts. Their top evaluation package offers up to $300,000 in funding, or $4 million with scaling. You can trade forex, commodities, and indices through EightCap.

Why We Love It: You can kick start your journey with FundedNext via three simple steps — pick a funding model, maintain consistency and get funded. The iOS and Android app are great for easier accessibility and the company's educational blog is super valuable.

Profit Split:

  • Up to 90%

What You Can Trade:

  • Forex, indices, cryptocurrencies and commodities

Funding Models:

  • Evaluation Model:
    • Phase 1: Achieve a 10% profit target in four weeks without rule violations.
    • Phase 2: Hit a 5% profit target in eight weeks with the same rules.
    • Payout: Starts at 80%, potentially rising to 90%.
  • Express Model:
    • Target: Achieve a 25% profit with no time limit, following drawdown rules and trading at least 10 days per month.
    • Payout: Starts at 60%, potentially rising to 90%.
  • Stellar Challenge:
    • No time limits, balance-based drawdowns, and 15% profit splits.

Additional Benefits:

  • Scaling Plan: Consistent profitable performance can increase your account balance by 40% every four months, up to $4 million.
  • Getting Started: Choose a funding model, maintain consistency, and get funded.
  • Accessibility: Available on iOS and Android.
  • Support: Customer support via live chat, email, Discord, Telegram, and Facebook.

Pros

  • Account increases can improve your confidence and earning potential
  • The lack of a time limit allows you to reach your first goal and get used to the platform
  • You get your payouts fast
  • The platform is available to those in over 195 countries
  • You can join their Discord to learn more and share with others

Cons

  • Some traders might prefer access to phone support
  • Consistency rules on the Express model can be restrictive

What is Prop Trading?

Prop trading, short for proprietary trading, is when traders use a firm's capital, not their own, to trade in various financial markets. They use instruments like shares, options, futures and currencies. Traders benefit from the firm's funding and resources, while the firm gains from their talent and shares in the profits generated.

What is a Prop Trading Firm?

A prop trading firm is a company that uses its own money to trade financial instruments like stocks, bonds, currencies and commodities. The goal is to make a profit from these trades. Unlike traditional investment firms, prop trading firms don't handle client money or offer financial services to the public. Instead, they focus solely on making money from their own trades.

How to Choose a Prop Trading Firm

Choosing a prop trading firm is crucial for aspiring traders. Focus on factors like reputation, trading strategies, support and risk management.

Company Reputation

A prop firm’s reputation impacts your trading experience. Look for firms with a strong track record and positive feedback from traders who have used the platform. Compliance with financial regulations and effective handling of issues should also be a contributing factors to a firm's credibility.

Fees and Profit Sharing

Understand the fee structure, including any one-time fees and refundable deposits. Pay attention to the profit-sharing terms to ensure they align with your financial goals.

Withdrawal Policies

Check the firm’s guidelines on withdrawal limits and processing times. Make sure they offer convenient withdrawal methods and understand any restrictions on the frequency of withdrawals.

Trading Tools and Flexibility

Access to advanced trading tools is crucial to make sure you are trading using the tools your familiar with. If you use MetaTrader 4 already, make sure the firm offers it. Ensure the tools meet your needs and offer flexibility, so that you can trade from various devices.

Customer Support and Community

Reliable customer support is essential. Look for firms with dedicated support channels like email, phone, or live chat. Additionally, a supportive trading community can provide valuable insights and help you learn from other traders.

Pros and Cons of Prop Trading

Prop trading is highly advantageous to traders who want to increase profits. However, it can also have some drawbacks. Here are some pros and cons of becoming a prop trader. 

ProsCons
Excellent support: Due to the nature of the operation, proprietary trading firms often comprise a closely-knitted community of people. The implication is that traders are offered quick support, and issues are resolved timely, unlike retail brokerages.Potential for loss of capital: Compared to retail brokers, prop trading firms are highly under-regulated. While this means fewer operating costs, there's an inherent risk of losing your capital, especially if the principals are fraudsters. You must therefore do due diligence and invest only what you can lose.
Liquidity through open order: If you mainly trade in open positions, you're better off as a prop trader. The reason is that most prop firms allow you to open multiple orders simultaneously. High fees: Most prop firms require you to pay for the modeling and trading software, especially if you trade remotely. The monthly fee for most sophisticated trading software may be as high as $300. When you factor in other costs that may arise, you may have no alternative but to reconsider, especially on comparing retail trading fees.
Market accessibility for undercapitalized traders: Prop trading makes it easy for undercapitalized traders with requisite trading expertise to access and profit from the financial market. Proprietary accounts might be ideal if you've less than $10,000 in investment capital. The reason is that your buying power will trump anything you can get as a retail client.Mostly for day trading: Prop trading leverage mainly applies in day trading. You may likely get different leverage for overnight positions than day trading. The implication is that, to a greater extent, prop trading is essentially day trading. Most prop firms do not permit overnight trading.
Streamline short selling: For effective short selling, you first need to locate shares that are good candidates for shorting. This process might be challenging as a retail trader, especially as some equities may be on the threshold or hard to borrow and so unavailable for shorting. With prop trading, you can access a long list of shorting inventories.Intellectual theft: If your strategy consistently delivers profitability, the prop firm may look for a way to decode your approach. For instance, they can piggyback your method and teach them to computers via machine learning.

Conclusion

Prop trading is highly profitable since the prop trader has access to sophisticated modeling and trading tools and pools of market information that are vital in critical decision-making. If you have an excellent understanding of the financial market trends and can trade successfully, prop trading firms can accelerate your journey to financial independence. Undercapitalized professional traders can also tap into the opportunity provided by proprietary trading firms to reap a return. 

Frequently Asked Questions

Q

Do prop firms really pay out?

A

Yes, some proprietary trading firms (prop firms) do pay out profits to their traders. However, the terms and conditions vary between different firms, so it’s important to do thorough research and understand the specific payout structure and policies of the firm before getting involved.

Q

Which prop firm is better than FTMO?

A

It depends on your preferences and goals, along with what you are looking for from trading conditions, funding options, support services and overall reputation.  Apex Trader Funding and FXIFY are two great alternatives to FTMO. If you are in the US, note that FTMO has stopped accepting US prop trader.

Q

How much do prop trading firms make?

A

Prop trading firms make between 10% to 50% of each trader’s profits depending on the split profit.

Q

How do prop trading firms make money?

A

Prop trading firms make money by taking a percentage share of each trader’s profit and account opening charges. They may also charge traders for training and expert coaching.

 

Q

Who should try prop trading?

A

Prop trading can be a good idea for anyone who understands how to invest but doesn’t have the backing they need. Prop trading may also be a good idea for those who want to learn as they trade, but you must find a platform that allows you to learn and grow.

About Chika Uchendu

Chika Uchendu is an investing writer and investment platform analyst passionate about helping people learn more about managing their finances, making informed investment decisions, and navigating the complex landscape of investment platforms to find the best options for their financial goals and needs. He has over 8 years of experience writing compelling articles for various reputable publishers across diverse topics. When he’s not writing content, he’s wrangling and analyzing data to help businesses make informed decisions.