Prop Firm
A company that gives skilled traders access to its own capital to trade, splitting the profits with them — no personal savings required.
A prop firm (short for proprietary trading firm) is a company that puts its own money behind traders. You prove your skill on a defined test, the firm hands you a funded account, and you keep the large majority of what you make. In the modern futures space that’s usually 80–90% of the profits, with your downside limited to the modest fee you paid to take the evaluation.
This is the core opportunity: capital you never had to save. A trader who could only ever risk $2,000 of personal savings can be sitting in front of a $50,000 or $150,000 buying-power account within weeks — because the firm, not the trader, is carrying the capital risk.
Here’s what the arithmetic looks like on a single good month:
| Item | Amount |
|---|---|
| Funded account size | $50,000 |
| Profit made in the month | $4,000 |
| Profit split to trader (90%) | $3,600 |
| Split to firm (10%) | $400 |
| Trader’s original evaluation fee | ~$150 |
One solid month can return the evaluation fee many times over. That’s the shape of the deal.
The trade-off is that the firm sets the rules of the game — a profit target to hit, a daily loss limit and a drawdown to respect, and sometimes a consistency rule on how evenly your profits arrive. None of these are obstacles. They’re the discipline that gets you funded, and mastering them is exactly what separates paid traders from the pack.
Firms differ a lot in how strict those rules are, which is why picking the right one matters as much as trading well. Start with our prop firm directory to compare, and read Prop Firm Challenges Explained if you’re getting ready for your first one.