{"term":{"slug":"prop-firm","term":"Prop Firm (Proprietary Trading Firm)","definition":"A company that provides traders with capital to trade financial markets in exchange for a share of profits. Modern retail prop firms charge an evaluation fee and fund traders who demonstrate consistent profitability.","extendedExplanation":"The term \"prop firm\" historically referred to firms like Jane Street or Citadel that hired traders as employees. The modern retail prop firm model is fundamentally different -- traders are independent contractors who pay an evaluation fee for the chance to trade firm capital remotely.\n\nRetail prop firms emerged around 2015 with FTMO being one of the earliest. The model exploded in popularity from 2020 onward, with dozens of firms now competing for traders. Key differentiators between firms include drawdown type (static vs trailing), evaluation structure (1-step vs 2-step), profit split percentages, and which markets/platforms are supported.\n\nThe industry remains largely unregulated. Traders should research firm reputation, payout history, and rule transparency before paying evaluation fees. Established firms like FTMO, TopStep, and Apex have years of payout track records.","exampleWithNumbers":"A trader pays $149 to Apex for a $100K futures evaluation. After meeting the $6,000 profit target over 7+ trading days without breaching the $3,000 trailing drawdown, they receive a funded account. Their first $25,000 in profits is kept at 100%, then 90% thereafter. The $149 fee is their only financial risk.","category":"evaluation","relatedTerms":["evaluation-phase","funded-account","challenge-fee","payout-split"]},"_links":{"self":"https://runvigil.app/api/glossary/prop-firm","page":"https://runvigil.app/learn/prop-firm","allTerms":"https://runvigil.app/api/glossary","learn":"https://runvigil.app/learn"}}