How Do Prop Firms Make Money? Fees, Payouts, Business Model

The short version

The product a retail prop firm sells is an evaluation: a paid test with numeric rules. The fee is paid up front (or monthly) whether or not the trader passes. Traders who pass and then meet the payout rules receive a share of the funded-account profit. For the firm, fee revenue comes in at purchase; payouts are a cost that arrives later and only for the traders who reach them.

That is a description of the structure, not a verdict. Whether a given firm is sustainable depends on its prices, its rules, how many traders reach payouts and how it manages its own costs, and the firms do not publish those numbers in a comparable form.

Where the revenue comes from

The revenue lines that appear in a firm’s public pricing, and what each one is:

• Evaluation (challenge) fees: a one-time price per attempt, or a monthly subscription that renews until the trader passes or stops. This is the main line. A financial-industry analyst writing for Finance Magnates in 2024 described evaluation fees, including subscriptions, as the main source of revenue for trader-funded firms (the author’s analysis, not firm-reported data).
• Resets and retries: restarting a failed evaluation, usually at a lower price than a new one. Each extra attempt is a further payment.
• Activation fees: a charge, at some firms, to open the funded account after a pass. Others charge none.
• Data and platform fees: monthly market-data or platform charges, mainly on futures accounts. Some firms include them.
• Add-ons: optional extras sold at checkout, such as a higher profit split, faster payouts, no consistency rule or a larger drawdown. The same Finance Magnates analysis lists add-ons for lower profit targets or higher drawdown limits as a revenue line.
• Repeat purchases: traders who buy again after a failure, or hold several accounts at once.
• Other streams named by that analyst, firm by firm and not universal: introducing-broker partnerships, markups on data fees, mentorship products, and an optional profit share. We cannot confirm which firms use them.

Our guides on the true cost of a prop firm, activation and data fees and the profit split explain each fee in detail and show them per firm.

What the fee stack looks like in our data

The tables below are computed from our verified dataset, not typed by hand. They show typical list prices and how common the extra fees are. Prices are what traders are asked to pay, not what firms earn.

At the 50K futures size, 16 of 27 firms charge no activation fee on their cheapest product, 11 charge one (median $130) and 0 are unverified. 19 futures firms publish their data fee: 18 include it, 1 charge monthly (Savius $90). Level 2 (depth of market) data is priced separately by 5 firms that publish it.

Where a value is not confirmed on the firm’s own site we count it as unknown rather than zero. Discount codes change what a trader pays, so the tables use list prices.

What share of traders pass or get paid

This is the number everyone wants and the one with the weakest sourcing. We have found two public figures, both reported by Finance Magnates and both supplied by firms or firm vendors, not independently audited:

• FPFX Tech, a software supplier to prop firms, shared data on more than 300,000 accounts held by about 100,000 traders at 10 prop firms (Finance Magnates, September 2024). It reported that about 14% of traders passed a challenge and that about 7% of traders reached a payout, with an average payout of about 4% of the plan size. The same article reports average spending of about $800 over the activity cycle, typically across three challenges.
• The Funded Trader, a firm, said its challenge pass rate ranges from 5% to 10% and that about 20% of funded traders then receive payouts (Finance Magnates, March 2025).

Treat both as context, not as a statistic for the whole industry or for any firm on this site. The samples, the time periods and the definitions of “passed” and “payout” differ, and neither source says how the data were collected. They do point the same way: most evaluation purchases do not end in a payout. Note that both sources describe the traders’ results; neither reports what the firms earn, and we do not turn them into a revenue estimate.

Illustration (hypothetical, not a forecast): if a trader passed one in ten attempts, the average number of attempts per pass would be ten, which is why our challenge cost calculator lets you enter more than one try.

Where payouts come from: simulated and live accounts

Most retail funded accounts are described by the firms themselves as simulated, and the firm pays the trader’s share of the simulated profit out of its own funds. In our dataset the funded-account type looks like this:

We verified the funded-account type for 64 of 78 firms: 52 simulated (sim-funded), 10 simulated first, live for some traders, 2 live capital.

Some firms document a path to live capital. For example, Topstep publishes that its Trading Combine and Express Funded Account are simulated and that its Live Funded Account trades live markets with the firm’s money, and describes the fee as covering access and support rather than being a trading deposit. That is one firm describing its own programme, not a statement about the industry.

Beyond that, the public record is thin. A trading-platform vendor, Spotware, writes that some firms copy selected trades from consistent traders into live accounts and that evaluation fees are the primary revenue stream, but it names no firms and gives no data (a vendor’s general description). We name no firm as routing, copying or hedging client trades, because we have not found a credible source that does. If the question matters to you, look for the firm’s own statement in its terms of service.

The counterparty question and the My Forex Funds case

Whether a firm profits from trader losses is not only a question about fees. In September 2023 the U.S. CFTC charged the operator of My Forex Funds, alleging among other things that the firm was the counterparty to nearly all customer trades, so that customer losses were the firm’s gain, and that it had collected about $310 million in fees. In 2025 a court dismissed that case with prejudice. Both documents are linked in the sources.

An allegation that failed in court is not a finding, and it says nothing about other firms. It shows why regulators asked who sits on the other side of a prop trader’s orders, and why a firm’s terms on that point deserve a read.

The conflict-of-interest question

This section is our reading of the structure, not a finding about any firm. It is reasoning from how the fees work.

• A firm that earns mostly from up-front evaluation fees is paid when a trader buys, not when a trader succeeds. Its revenue does not fall when a trader fails, and a reset can add to it. Payouts are a cost.
• A firm that earns part of its income from a profit share, or from live capital that profits when its traders do, has some interest in traders succeeding. How large that interest is depends on how much of its income it represents, which is rarely published.
• Rules sit in between. Tight rules lower pass rates and payouts; loose rules raise them. Because firms change rules and prices often, the rule set matters more than the marketing.

None of this means a firm is acting against its traders. It means the incentive depends on the model, and the model is something you can ask about and read in the terms.

Where review sites, including this one, fit in

Comparison sites also have a revenue model. PropFirmVS earns commissions from some firms when a visitor buys through an affiliate link, at no extra cost to the visitor. Commissions never change the data in a table, the order of a list or whether a firm is listed; we state the full policy on our how-we-make-money, transparency and editorial policy pages. Treat any review site, ours included, the same way you treat a firm: read its disclosure and check the underlying rules yourself.

What this means for you as a trader

A practical checklist built on our own tools and pages:

• Work out the cost of several attempts, not one: use the challenge cost calculator to add resets, activation and data fees.
• Check what happens after a pass: use the payout timeline to see what you could withdraw in the first months under each firm’s rules.
• Read the funded-account terms for whether the account is simulated or live, which entity pays you and what the firm says about unpaid profit if it closes.
• Look at the trust signals on the firm page (dated events with sources) and at the closed-firms register before you pay.
• Treat the fee as money you may not get back, and size how many attempts you will pay for in advance.
• Confirm prices and rules on the firm’s own site on the day you buy; both change often.

What we do not claim here

We do not state any firm’s revenue, margin, payout ratio or share of failing traders, because we have no sourced figure for them. The pass and payout figures above are third-party reports of unknown method. Where this article gives an interpretation, it is labelled as ours.

Trading involves substantial risk of loss and you can lose the evaluation fees. Nothing here is financial advice.

FAQ

Sources

• Finance Magnates (September 2024): Only 7% of 300,000 prop trading accounts achieved payouts (FPFX Tech data)
• Finance Magnates (March 2025): Only 1 in 20 traders pass prop firm challenges, reports The Funded Trader
• Finance Magnates (April 2024): How do trader-funded firms generate revenue? (author’s analysis)
• Spotware (October 2025): Do prop firms use real money? (platform vendor’s description)
• Topstep: Trading Combine, Express Funded Account and Live Funded Account (firm’s own description)
• Topstep blog (February 2026): Trading with your money vs trading with our money
• CFTC release 8771-23 (1 Sep 2023): CFTC charges “My Forex Funds”
• Willkie Compliance Concourse (May 2025): court dismisses the CFTC case against My Forex Funds with prejudice

Related lists and tools

Challenge cost calculatorPayout timelineClosed prop firmsCheapest prop firmsTransparencyEditorial policy

Keep reading

• The true cost of a prop firm: fees you only see later
• Sim-funded vs live prop accounts: what “funded” really means
• How PropFirmVS makes money and how we compare firms
• Prop firm red flags to watch for

Compare prop firms