Prop trading glossary
Short definitions of the terms used in our comparison tables. Follow the links for full explanations with examples.
- Activation fee
- A fee charged to turn a passed evaluation into a funded (performance) account. May be one-time, monthly or none. Read more →
- Best-day rule
- Another name for the consistency rule: a cap on how much of your profit a single day may represent. Read more →
- Challenge / Combine / Evaluation
- The paid test you must pass before getting a funded account. Different firms use different names. Read more →
- Consistency rule
- A rule limiting the share of total profit that may come from one day (for example 30%, 40% or 50%). Read more →
- Contract scaling
- A plan that limits how many contracts you can trade until you have earned enough profit. Read more →
- Daily loss limit (DLL)
- The most you may lose within one trading day before the account is stopped or breached. Read more →
- Data feed fee
- A recurring charge for exchange market data on futures accounts. Sometimes included in the price. Read more →
- Drawdown
- The amount your account may fall before it is closed. The model (static, EOD or intraday trailing) matters as much as the amount. Read more →
- EOD (end-of-day) drawdown
- A trailing drawdown that is only updated at the end of the trading day from your closing balance. Read more →
- Funded account / PA
- The account you receive after passing. Also called a performance account (PA). Profits are split with the firm. Read more →
- Instant funding
- An account without an evaluation phase, usually priced higher, with a lower split and stricter rules. Read more →
- Intraday trailing drawdown
- A trailing drawdown that follows your highest open equity in real time, including unrealised profit. The hardest model. Read more →
- Payout buffer
- Profit or balance that must remain in the account after a withdrawal. Read more →
- Profit split
- The percentage of profit you keep, such as 80/20 or 90/10. Read more →
- Profit target
- The profit you must reach during the evaluation to pass. Read more →
- Reset
- Paying to restart an evaluation after breaking a rule. Read more →
- Sim-funded
- A funded account traded on a simulated feed rather than with live capital. Read more →
- Static drawdown
- A fixed loss limit measured from the starting balance that never moves up. Read more →
- Trailing drawdown
- A loss limit that rises with your profits but never falls. It can trail intraday or at end of day. Read more →
- True cost to first payout
- Our calculation of evaluation + activation + data fees before you can withdraw, using only verified numbers. Read more →