What Is a Prop Firm?
A proprietary trading firm (prop firm) is a company that provides traders with funded accounts to trade financial markets. The firm supplies the capital, and the trader receives a share of the profits generated.
How Do Prop Firms Make Money?
Prop firms generate revenue through evaluation fees, profit splits, and technology/data fees. A-Book firms also earn through order flow, while B-Book firms internalize trades.
What to Look For in a Prop Firm
Key factors include payout terms, drawdown rules, profit split, entry cost, rule clarity, reputation, and evidence confidence. Use the current Scoring V3 ranking to compare.