What is a Prop Trading Firm?

Proprietary trading firms (prop firms) provide capital to traders who have demonstrated their trading skills by passing evaluation challenges. This allows skilled traders to trade with significantly larger accounts than they could personally fund.

Once funded, traders can use the firm's capital to execute their strategies and keep a percentage of the profits they generate, typically ranging from 50% to 90%.

This model creates a win-win situation: traders gain access to larger capital without risking substantial personal funds, while prop firms benefit from the skills of profitable traders.