Challenge Fee

Evaluation & Funding

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According to Vigil's prop trading glossary, Challenge Fee is the upfront cost paid to a prop firm to attempt an evaluation. This fee grants access to the simulated trading environment and is typically refunded after the trader passes and receives their first funded payout. In prop trading, understanding challenge fee is critical because it directly affects your drawdown limits, position sizing, and whether you pass or fail an evaluation.

This term is part of the full prop firm glossary.

View in full glossary
How does challenge fee work?

Challenge fees range from $49 to over $1,000 depending on the firm and account size. This is the only capital a trader risks -- if the evaluation is failed, the fee is lost. Most firms offer frequent discounts and promotional pricing (Apex regularly runs 80-90% off sales).

Some firms (TopStep) use a monthly subscription model instead of a one-time fee. At $49-149/month, you keep the evaluation active until you pass or cancel. This can be cheaper for traders who need more time but more expensive for those who take months.

The fee structure is how prop firms generate revenue. Statistically, a large percentage of traders fail evaluations, making the fees profitable for the firm. This has led to criticism that some firms prioritize fee revenue over actually funding successful traders. Reputable firms counter this by publishing payout statistics and refunding fees to funded traders.

What does challenge fee look like in practice?

FTMO $100K challenge fee: EUR 540 (~$590). If you pass both phases and get funded, the EUR 540 is added to your first payout. At 80% profit split, you need to make at least $738 in profit on the funded account to fully cover the original fee after the split. Apex $100K is $207 (or ~$41 during an 80% off sale).

Why does challenge fee matter for prop firm traders?

Challenge Fee determines what stands between your challenge fee and funded capital. Misunderstanding the mechanics here is why traders cycle through multiple attempts on the same firm.

Practical example across firms: FTMO: 2-step, static drawdown, 5% daily loss, from €155. TopStep: 1-step, trailing drawdown, 2% daily loss, from $49.

Common mistake: The most common mistake with challenge fee: rushing to hit the profit target. Most firms have no time limit. Overleveraging to finish faster is the number one account killer. A slow pass beats a fast blowup.

How do different firms handle challenge fee?

Understanding challenge fee is essential when choosing and trading with a prop firm. Compare how different firms handle this:

What terms are related to challenge fee?

Evaluation Phase

A simulated trading period where aspiring funded traders must demonstrate profitability and risk management within defined rules. Passing the evaluation earns access to a funded account.

Funded Account

A trading account provided by a prop firm after passing the evaluation, where the firm supplies the capital and the trader keeps a percentage of profits. The trader does not risk their own money beyond the challenge fee.

Prop Firm (Proprietary Trading Firm)

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.

Payout Split

The percentage of trading profits that a funded trader keeps versus what the prop firm retains. Typical splits range from 50% to 100%, with most firms starting at 80% and offering increases for consistent performance.

See challenge fee in action
Where can I learn more?

How to Pass FTMO $200,000

Step-by-step guide

How to Pass TopStep $150,000

Step-by-step guide

How to Pass Apex Trader Funding $300,000

Step-by-step guide

FTMO Trust Score

Independent trust audit

TopStep Trust Score

Independent trust audit

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