What Is Prop Trading?
Prop trading (short for proprietary trading) means trading with a firm's money rather than your own, and splitting the profits. Traditionally it happened inside banks and trading firms; today, online prop firms let anyone earn a funded account by passing an evaluation.
What it actually means
“Proprietary” just means the capital belongs to the firm. A prop trader uses that capital to trade, keeps most of the profit, and doesn't risk personal savings. The firm provides the money and the rules; the trader provides the skill.
The modern prop-firm model
Today's retail prop firms run evaluations: pay a fee, hit a profit target under drawdown rules, and get funded. It has opened prop trading to anyone with skill and discipline — no finance degree or huge account required. How prop firms work →
Who it's for
Prop trading suits skilled but under-capitalized traders who'd rather risk a small fee than a large personal account. It rewards consistency and punishes gambling — the same traits that make any trader successful. Explore funded accounts and the best firms for beginners.
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Is prop trading legit?
The model is real: reputable firms fund consistent traders and pay out profits. As with anything, quality varies — choose established firms and read the rules carefully.
What's the difference between prop trading and a normal brokerage account?
In a brokerage account you trade your own money and keep all the profit and risk. In prop trading you trade the firm's money, follow their rules, and split the profits.
Educational content only, not financial advice. Trading futures carries substantial risk of loss.