A company that provides traders with capital to trade financial markets in exchange for a share of profits.
A proprietary trading firm ("prop firm") provides traders with simulated or real capital to trade stocks, futures, forex, and other instruments. In exchange, the firm takes a percentage of profits generated.
Modern Prop Firms vs Traditional
Traditional Prop Firms
- Traders work in the firm's office
- Trade with real firm capital
- Usually salary + profit share
- Rigorous hiring process
Online Prop Firms (Modern)
- Traders trade from anywhere
- Usually simulated accounts that mirror live conditions
- Pay a fee for an evaluation/challenge
- Pass the evaluation → receive a funded account
- Profits are real, withdrawable
How Online Prop Firms Make Money
- Challenge Fees: The primary revenue source — fees from traders attempting evaluations
- Profit Share: Their cut of profitable funded traders' earnings
- Data Fees: Some firms charge for market data
Choosing a Prop Firm
Key factors to compare:
- Account sizes and challenge fees
- Drawdown rules (static vs trailing)
- Profit split and scaling plan
- Payout frequency
- Trading restrictions
- Platform support
Use PropTally's firm comparison tool to evaluate firms side-by-side.