Prop trading: what it is, how a prop account and challenge work

Prop trading: what it is and where the word came from

The word came from banks: there, prop trading meant trading with the bank's own money, not clients'. In the US, the Volcker Rule generally banned banks from such trading; it is enforced by five regulators led by the Fed.

In online prop trading, everything is different. A prop firm does not hire traders into an office or give them the bank's capital. Anyone can buy an evaluation, trade under strict rules and, if successful, receive a share of the profit.

All seven prop firms in the PropMarketCap catalog operate on an online model.

Prop firms and prop companies: what they are and how they make money

Prop companies are organizations that sell traders an evaluation and pay those who pass a share of the profit. There are seven of them in the PropMarketCap catalog: Era Trade, FTMO, Hash Hedge, HyroTrader, SpiceProp, The Funded Way and Vanta Trading.

Prop companies' money comes from challenge fees. Everyone pays, but only those who pass the evaluation and then don't break the rules receive payouts.

How many people that is can be seen from the official statistics of the American Topstep for 2025. It is not in the PMC catalog, but its model is the same:

Exact Topstep figures: 16.8%, 33.3% and 0.71%; on the bars they are rounded to whole numbers. Out of a hundred attempts, fewer than twenty pass the evaluation, and even fewer people reach a payout.

The fee can only be refunded after success. In the PMC catalog, refund terms are listed for 106 out of 130 programs. In 75 of them, the fee is refunded together with the first or third payout, and none refunds it after a failed evaluation.

How the challenge works: the path from fee to payout

The challenge (paid evaluation) shows whether you can make money and not lose more than the limit. In the PMC catalog, two stages are most common. In 46 such programs, the typical target for the first stage is 8%, for the second 5%, the daily loss limit is 5%, and the overall limit is 10%.

The figures in the diagram are catalog medians as of 22.10.2026; a specific program has its own. For example, Era Trade's two-phase challenge for $10,000 costs $99, with targets of 8% and 5%, limits of 5% per day and 10% total, and the fee is refunded along with the third payout.

In money on this account: the first phase target of 8% is $800 in profit. The daily limit of 5% is $500: lose that much in one day and the evaluation is over. The overall limit of 10% is $1,000 from the starting balance.

This is a scenario, not a forecast: the $1,000 profit on the prop account still has to be earned without breaking a single limit. The price and terms are taken from the PMC catalog as of 22.10.2026.

One phase or two

A one-phase challenge is passed faster, but its limits are stricter. Comparison by catalog medians: 43 one-phase programs versus 46 two-phase ones.

With two stages, the buffer to the limit is larger: 5% per day versus 3% and 10% total versus 6%. At FTMO, a one-stage $10,000 account is even cheaper, 79 euros versus 89, but the daily limit there is 3% instead of 5%.

Prop account: what it is and how it differs from your own deposit

A prop account is an account you receive after an evaluation. Usually it is simulated, and the prop company pays the payout from its own funds according to the terms of the contract. Topstep states this directly on its program page: trading is simulated, payouts are real.

There is no profit target on a prop account, but loss limits remain. You breach the daily limit once - the account is closed.

Payouts are requested according to the prop company's schedule, not on any day. At FTMO, the first payout is possible from the 14th day after the first trade. Hash Hedge pays once every 14 days, no more than $10,000 per period. Era Trade pays up to 10% of the initial balance per period; on a $10,000 account that is $1,000.

Online challenges from foreign prop firms have no legal status in Russia. There is also no Central Bank supervision or client protection: in a payout dispute, you are left alone with the contract. Before paying, compare the rating and payout rules on the prop firm's card: a cheap attempt costs nothing if the payout is later denied.

How much prop trading costs and who is accepted from the CIS

The cheapest two-step $10,000 account in the catalog costs $92 at The Funded Way (Starter way program). At Era Trade and Hash Hedge, such an account costs $99. FTMO and SpiceProp charge in euros.

Click your country and the access column will change. The name leads to the prop firm's card with full rules.

Four out of seven prop firms work with Russia and pay out: Hash Hedge, Era Trade, SpiceProp and Vanta Trading. The Funded Way sells the challenge to Russians but pays only through the Rise service, and Rise does not serve Russia. FTMO and HyroTrader block Russia. At the same time, FTMO admits traders from Armenia, Georgia, Azerbaijan, Moldova and EU countries, and HyroTrader also from Kazakhstan and Uzbekistan.

Bypassing the ban via VPN is pointless. The Funded Way, in clause 7.4 of its terms, closes the account for this without a refund. The full rating and rules of all seven are collected in the PMC prop firm catalog.

Why most fail the challenge

At Topstep, 17 out of a hundred attempts make it to the end of the evaluation. One broken rule ends the evaluation, even if the account is in profit. These five rules from the PMC catalog are best read before paying.

The terms of each program, including limits and payout rules, are in the challenge catalog. Read them before paying, not after the first violation.

Where a Beginner Should Start with Prop Trading

If you have never traded with a daily loss limit, it is too early to buy a challenge. First, understand the rules and practice on a demo account with the same limits: 5% per day and 10% overall.

Learning the basics at the PropMarketCap Academy is free: 4 of 28 lessons are open to everyone. The first of them, the lesson "What Is Prop Trading", is also available as a video: it covers the stages of a challenge, the prop account, payouts and common beginner mistakes. The next open lesson teaches you to read the challenge rules before paying.

Summary

Prop trading lets you trade without a large deposit of your own, but the evaluation is paid and only a minority pass it. Before paying, understand the rules: start with the free PMC Academy lesson on prop trading and practice on a demo with the same limits. If you already trade your own system, find a challenge that fits your budget in the challenge calculator.