Getting Started
Prop Trading Firm
Definition
A company that provides traders with capital to trade financial markets in exchange for a share of the profits.
How It Works
Proprietary (prop) trading firms give traders access to large funded accounts — often $10K to $400K — so they can trade without risking their own money. In return, the firm takes a percentage of the profits (typically 10-20%).
Most modern prop firms require traders to pass an evaluation challenge before receiving a funded account. This model lets talented traders access capital they couldn't otherwise afford, while the firm earns from profit splits and challenge fees.
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