What is Prop Firm?
A prop firm (proprietary trading firm) provides trading capital to traders in exchange for a share of profits. The retail prop firm model typically requires traders to first pay for and pass an evaluation challenge, after which they receive a funded account. Most retail prop firm accounts are simulated-live structures where payouts come from the firm's treasury rather than real market profits. The retail prop firm industry has paid out over $1B globally as of 2026.
Key takeaways
A firm providing trading capital in exchange for profit splits.
The retail prop firm model typically requires traders to first pay for and pass an evaluation challenge, after which they receive a funded account.
The retail prop firm industry has paid out over $1B globally as of 2026.
Prop Firm vs. Funded Account
Two terms that frequently get conflated. Here's how they actually differ.
Prop FirmFirm Types · ELITE
Funded AccountAccount Types · ROOKIE
A firm providing trading capital in exchange for profit splits.
The post-evaluation account where the trader earns payouts.
Frequently asked questions
What is Prop Firm?
A prop firm (proprietary trading firm) provides trading capital to traders in exchange for a share of profits. The retail prop firm model typically requires traders to first pay for and pass an evaluation challenge, after which they receive a funded account. Most retail prop firm accounts are simulated-live structures where payouts come from the firm's treasury rather than real market profits.
Why does Prop Firm matter for prop firm traders?
Prop Firm is a specific kind of prop firm operator. Each firm type has its own risk model, regulatory exposure, and economics — picking the right type for your strategy and jurisdiction is half the battle.
How is Prop Firm different from Funded Account?
Prop Firm and Funded Account are commonly confused. Prop Firm: A firm providing trading capital in exchange for profit splits. Funded Account, by contrast: The post-evaluation account where the trader earns payouts.
What should traders watch out for with Prop Firm?
Most retail prop firm accounts are simulated-live structures where payouts come from the firm's treasury rather than real market profits. The retail prop firm industry has paid out over $1B globally as of 2026.