What Is a Prop Firm?

A proprietary trading firm (prop firm) is a company that provides traders with capital to trade in exchange for a share of the profits. Instead of risking your own money, you trade the firm's funds and keep a percentage of what you earn — typically between 70% and 90%.

How Does It Work?

The process is straightforward:

1. Choose an evaluation account — Pick a firm and account size that fits your trading style and budget.
2. Pass the evaluation — Meet the profit target while staying within the drawdown rules. Most firms require you to hit a specific dollar amount without exceeding your maximum loss limit.
3. Get funded — Once you pass, the firm gives you a funded account with real capital. You trade it just like the evaluation, but now your profits are real.
4. Collect payouts — Withdraw your share of the profits on a regular schedule (weekly, bi-weekly, or monthly depending on the firm).

Why Are Prop Firms So Popular?

The appeal is obvious: you don't need $50,000 or $100,000 of your own money to trade at that level. An evaluation for a $50K account might cost as little as $50–$200, depending on the firm and any active promo codes.

Other benefits include:

• Limited risk — Your maximum loss is the cost of the evaluation. You can't lose more than you paid.
• Scalability — Many firms let you hold multiple funded accounts, sometimes up to $600K+ in total allocation.
• No PDT rule — Since you're not trading in a personal brokerage account, the Pattern Day Trader rule doesn't apply.

What Should You Watch Out For?

Not all prop firms are created equal. Here are some things to research before choosing one:

• Drawdown type — Trailing drawdown is harder to manage than static or end-of-day. Understand what you're signing up for.
• Consistency rules — Some firms require your daily profits to be somewhat even. This can trip up traders who have one big winning day.
• Payout speed — How quickly does the firm actually pay you? Check reviews and community feedback.
• Hidden fees — Activation fees, monthly data fees, and reset costs can add up.

How to Get Started

The best first step is to compare firms side-by-side. Look at the all-in cost, profit targets, drawdown rules, and payout terms. That's exactly what we built CyberPropFirms for — use our comparison table to find the best deal for your trading style.

Once you've picked a firm, start with a smaller account to get a feel for the rules before scaling up. And always check our promo codes page — you might save 20–80% on your evaluation.