When I first learned what a prop firm was and how they work, I was like, holy shit! They do that??? Like, they just GIVE you an account full of money to trade with and you get to keep MOST of the profit?? 🤯
Discussion
Wow. What happens if you were to fuck it up and (hypothetically!) lose everything, i assume you would owe them 250k, no?
They put tight risk limits on it. I have 250k of buying margin but I can only lose 10k before they cut me off. But no I don't owe them that money back. I would just have to go through their evaluation again and earn funding again.
Their upside is that I have a 90/10 profit split with them that's taken out of my withdrawals. So if I request a withdrawal of 10k, I get 9k and they pay themselves 1k.
It's a pretty sweet deal because it takes a lot of money to get started trading futures, and this way I don't have to risk my own money starting out.