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Top Proprietary Trading Firms for U.S. Traders

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Proprietary Trading (Prop Firms): Guide for U.S. Traders

Proprietary trading, commonly known as “prop trading,” has rapidly evolved into a major gateway for retail and professional traders seeking access to significant capital, advanced technology, and structured trading environments. In 2025, the U.S. prop trading landscape is more dynamic and competitive than ever, with dozens of firms offering funded accounts, profit-sharing models, and innovative evaluation processes.

Overview of proprietary trading, explains how prop firms operate, details the types of prop firms available, and analyzes the regulatory environment in the United States. It then presents an in-depth comparison of the top proprietary trading firms for U.S. traders, including DNA Funded, BrightFunded, Topstep, Apex Trader Funding, and Funder Trading, with clear pros and cons for each. The report concludes with actionable guidance for evaluating prop firms, understanding contract terms, and anticipating future trends.

What Is Proprietary Trading?

Proprietary trading, or “prop trading,” refers to financial institutions, banks, or specialized firms trading financial instruments using their own capital rather than client funds. The primary goal is to generate profits for the firm itself, not for external investors. Prop trading can involve a wide array of asset classes, including stocks, bonds, commodities, currencies, derivatives, and increasingly, cryptocurrencies.

Unlike traditional brokerage models that earn revenue from commissions and client fees, prop trading firms seek to maximize returns by leveraging their perceived competitive advantages—such as superior technology, market expertise, or proprietary strategies. This approach allows firms to realize 100% of the gains from successful trades, while also bearing the full risk of losses.

Prop traders may employ various strategies, including:

  • Index arbitrage
  • Statistical arbitrage
  • Merger arbitrage
  • Fundamental and technical analysis
  • Volatility arbitrage
  • Global macro trading

The autonomy of prop trading desks within larger institutions is critical, as it ensures that proprietary trading activities do not conflict with client interests or regulatory requirements.

How Prop Trading Firms Operate

Prop trading firms operate by identifying skilled traders, providing them with access to firm capital, and sharing profits generated from successful trading. The modern prop firm model typically involves:

  • Evaluation or challenge phase: Traders pay a fee to participate in a simulated trading challenge, where they must meet specific profit targets and risk management criteria.
  • Funded account stage: Successful traders receive access to a funded account, trading with the firm’s capital under strict risk rules.
  • Profit-sharing arrangement: Profits generated are split between the trader and the firm, with splits ranging from 70/30 to 100% in favor of the trader, depending on the firm and performance milestones.
  • Scaling opportunities: Consistent traders may have their account size increased, unlocking greater earning potential.

Prop firms differ from brokers in that they do not handle client funds or execute trades on behalf of customers. Instead, they allocate their own capital to traders who have demonstrated skill and discipline, often through rigorous evaluation processes.

Types of Prop Firms: Remote vs. In-House (Traditional)

Remote Prop Trading Firms

Remote prop trading firms are a modern innovation, allowing traders to work from anywhere via online platforms. These firms provide access to funded accounts, advanced trading technology, and global markets without requiring physical presence in an office. Remote prop firms typically operate on a service-based model, charging evaluation fees and offering profit-sharing arrangements.

Advantages:

  • Flexibility and independence
  • Access to capital without personal risk
  • Growth potential through scaling
  • Learning resources and support

Disadvantages:

  • Remote work challenges (distractions, connectivity)
  • Limited social interaction and networking
  • Self-discipline required for success
  • Potentially limited resources compared to institutional desks

In-House (Traditional) Prop Firms

Traditional prop firms are physical offices, often located in major financial centers, where traders work together under direct supervision. These firms typically recruit graduates from top universities or experienced professionals, offering base salaries, bonuses, and structured career progression. The firm provides all trading capital, and traders are employees rather than contractors.

Advantages:

  • High earning potential (base salary + bonuses)
  • Structured training and mentorship
  • Career advancement opportunities
  • Prestige and industry connections

Disadvantages:

  • Competitive selection process
  • Performance-based compensation (risk of termination)
  • Pressure and high expectations
  • Limited access for retail traders

Hybrid Prop Firms

Hybrid prop firms blend elements of both models, offering instant funding options alongside traditional evaluation challenges. Traders can choose between a fast-track to funded accounts or a more structured challenge, with flexible profit splits and scaling options. Hybrid models are gaining popularity for their adaptability and trader-centric approach.

Prop Firm Business Models and Revenue Streams

Prop trading firms generate revenue through several channels:

  • Trading profits: The primary source, earned by buying and selling financial instruments using firm capital.
  • Evaluation and challenge fees: Fees charged to traders for participating in simulated trading challenges.
  • Profit-sharing: The firm retains a percentage of profits generated by funded traders.
  • Platform and data fees: Charges for access to proprietary trading platforms, market data, and analytics tools.
  • Spread income: For market-making firms, profits from the bid-ask spread.
  • Interest income: Earnings from cash balances or fixed-income securities.
  • Exchange rebates: Incentives from exchanges for providing liquidity or executing high volumes.

The balance between trading profits and fee-based revenue varies by firm. Some firms rely heavily on evaluation fees, while others prioritize profit-sharing and scaling successful traders.

Capital Requirements and Account Sizes

Prop firms offer a range of account sizes, typically from $5,000 to $500,000 or more. The account size determines the trader’s buying power, risk limits, and profit targets. Larger accounts require higher evaluation fees and stricter risk management, but offer greater profit potential and flexibility.

Typical account tiers:

  • Small ($5,000–$25,000): Lower entry cost, tight drawdowns, suitable for beginners.
  • Medium ($50,000–$100,000): Standard tier, balanced risk and profit potential.
  • Large ($150,000–$300,000+): High profit potential, wider drawdown allowance, best for experienced traders.

Account scaling plans allow traders to increase their capital allocation as they demonstrate consistent profitability, often following a 6:1 profit-to-loss ratio rule.

Fee Structures, Profit Splits, and Payout Schedules

Prop firms employ diverse fee and payout structures:

  • Evaluation/challenge fees: One-time or monthly fees to participate in trading challenges, ranging from $49 to $1,209 depending on account size and firm.
  • Profit splits: Standard splits range from 70/30 to 90/10 in favor of the trader. Some firms offer 100% profit splits for initial payouts or upon reaching performance milestones.
  • Payout frequency: Weekly, bi-weekly, monthly, or on-demand. Fast payouts and transparent withdrawal policies are increasingly common.
  • Scaling bonuses: Higher profit splits or increased account sizes for consistent performance.
  • Platform/data fees: Monthly charges for trading software and market data, typically $30–$80 per month.
  • Add-ons: Optional features such as faster payouts, higher profit splits, or swap-free accounts, often for an additional fee.

Example:

  • DNA Funded: 80% profit split (upgradeable to 90%), 14-day payout cycle (7 days with add-on), challenge fees from $49, account sizes $5K–$200K.
  • BrightFunded: 80%–100% profit split, bi-weekly payouts, challenge fees from €55, account sizes $5K–$200K, unlimited scaling plan.
  • Topstep: 100% of first $10,000 in profits, then 90%, weekly payouts, monthly fees $49–$149, account sizes $50K–$150K.
  • Apex Trader Funding: 100% of first $25,000, then 90%, monthly fees $167–$657, account sizes $25K–$300K, payouts on demand after 8 trading days.
  • Funder Trading: 100% up to $6,000, then 80/20, account sizes up to $250K, coaching included, stocks and options only.

Trading Platforms, Execution, and Technology

Prop firms support a variety of trading platforms, each with unique features and compatibility:

  • MetaTrader 4/5 (MT4/MT5): Popular for forex and CFDs, supports manual and automated trading.
  • cTrader: Advanced charting, fast execution, and support for EAs.
  • DXTrade: Cloud-based, customizable, suitable for discretionary and hybrid traders.
  • TradeLocker: Integrated with TradingView, advanced charting, manual trading focus.
  • TopstepX: Proprietary platform for futures, integrated TradingView, sentiment tools.
  • NinjaTrader, Tradovate, Rithmic: Preferred for futures trading, offering low-latency execution, advanced analytics, and compatibility with algorithmic strategies.

Execution speed, platform stability, and access to advanced analytics are critical for success, especially for scalpers and algorithmic traders. Many firms now offer API access, VPS hosting, and support for automated trading systems.

Supported Asset Classes

Prop firms vary in the asset classes they support:

  • Forex: Major, minor, and exotic currency pairs; high leverage and liquidity.
  • Stocks: U.S. and global equities; often limited to blue-chip or large-cap stocks.
  • Futures: Indices, commodities, currencies, metals, agricultural products; popular among U.S. traders.
  • Commodities: Gold, oil, silver, natural gas, agricultural products.
  • Indices: S&P 500, NASDAQ, DAX, FTSE, and others.
  • Cryptocurrencies: Bitcoin, Ethereum, Solana, meme coins; leverage and trading rules vary.
  • Options: Offered by select firms (e.g., Funder Trading).

Multi-asset support allows traders to diversify strategies and adapt to changing market conditions. Some firms specialize in specific asset classes, such as futures (Topstep, Apex) or stocks and options (Funder Trading).

Regulatory Environment in the U.S.

Federal Oversight

The U.S. regulatory landscape for prop trading is complex, involving several agencies:

  • Securities and Exchange Commission (SEC): Regulates securities markets, broker-dealers, and investment advisers. Prop firms trading only their own capital and not handling client funds generally avoid SEC registration requirements.
  • Commodity Futures Trading Commission (CFTC): Oversees futures, options, and swaps. Prop firms trading proprietary funds and not acting as futures commission merchants (FCMs) or soliciting client orders typically avoid CFTC registration. However, recent regulatory changes are increasing scrutiny, especially for firms offering futures access.
  • Financial Industry Regulatory Authority (FINRA): Self-regulatory organization for broker-dealers. Prop firms not engaging in broker-dealer activities or handling customer accounts generally do not require FINRA membership.

State-Level Regulations

State securities laws (“Blue Sky Laws”), business registration, and consumer protection statutes may also apply. Legitimate prop firms ensure compliance with both federal and state requirements, including business registration and transparent contractual relationships.

Key Legal Distinctions

Prop firms avoid triggering broker-dealer or investment adviser registration by:

  • Trading only with proprietary capital
  • Not accepting or managing client funds
  • Offering evaluation services rather than investment management
  • Maintaining clear, transparent contracts and terms of service.

Volcker Rule Implications

The Volcker Rule restricts large banks from engaging in proprietary trading, aiming to reduce systemic risk. Most retail-focused prop firms are not affected, as they do not operate as banks or manage client assets.

Compliance, KYC/AML, and Tax Implications

Prop firms must comply with anti-money laundering (AML) and know-your-customer (KYC) regulations, verifying trader identities and monitoring for suspicious activity. U.S. traders typically receive 1099 forms for trading income, which is reported as self-employment or business income. Self-employment tax may apply, and traders are advised to consult tax professionals for guidance.

Risk Management and Trader Rules

Prop firms enforce strict risk management to protect capital:

  • Daily loss limits: Typically 1–5% of account equity; exceeding triggers account suspension or reset.
  • Maximum drawdown: 5–20% of total capital; breaching results in account closure.
  • Per-trade risk cap: Often 1% of account balance; enforced via mandatory stop-losses.
  • Position limits: Caps on lot size or contract count, adjusted for volatility and account size.
  • Mandatory stop-loss placement: Stops must be set at a multiple of ATR or other volatility measures.
  • Consistency rules: Limits on single-day profits relative to total, preventing “one-hit wonders.”
  • Prohibited strategies: Martingale, grid trading, high-frequency trading (HFT), latency arbitrage, and multi-account hedging are commonly banned.

Traders must maintain detailed trade logs, adhere to reporting requirements, and respect confidentiality clauses regarding proprietary strategies.

Training, Mentorship, and Trader Development

Many prop firms offer structured training, mentorship, and educational resources:

  • Onboarding programs: Cover market microstructure, risk metrics, and platform usage.
  • Mentorship: Senior traders provide feedback, strategy refinement, and performance reviews.
  • Performance KPIs: Profit factor, win rate, average trade duration, and adherence to risk rules.
  • Community support: Active Discord servers, forums, webinars, and group coaching sessions.

Continuous education and peer learning are critical for long-term success, especially as market conditions and technology evolve.

Common Contract Clauses and Legal Terms

Prop firm agreements include key clauses:

  • Profit split triggers: Tiered splits based on cumulative profits or milestones.
  • Termination notice: Written notice periods (7–30 days) for voluntary or involuntary exit.
  • Non-compete and confidentiality: Restrictions on joining competing firms or sharing proprietary strategies.
  • Risk management obligations: Daily loss limits, mandatory stop-losses, and trade journal requirements.
  • Capital and margin provisions: Scaling rules, margin calls, and capital return policies.
  • Tax reporting: Self-employment income, quarterly estimated payments, and deductible expenses.
  • Dispute resolution: Arbitration clauses, often under FINRA or state law.

Traders should review all contract terms carefully, including payout schedules, scaling criteria, and grounds for termination.

Top Proprietary Trading Firms for U.S. Traders: Detailed Comparison

Below is a comprehensive comparison of leading prop firms for U.S. traders, focusing on business models, fees, profit splits, platforms, asset classes, and pros and cons.

Comparison Table: Top Prop Firms for U.S. Traders (2025)

FirmBusiness ModelAccount SizesFee StructureProfit SplitPayout SchedulePlatformsAsset ClassesProsCons
DNA FundedRemote, Broker-backed$5K–$200K$49–$1,209 one-time80% (90% w/add-on)14 days (7 w/add-on)TradeLocker, DXTradeForex, stocks, indices, commodities, cryptoTight spreads, flexible challenges, up to 90% split, 800+ markets, scalingNo EAs, crypto not in Rapid Challenge, basic support
BrightFundedRemote, Unlimited scaling$5K–$200K€55–€1,824 one-time80%–100%Bi-weekly (weekly w/add-on)cTrader, DXTrade, MT5Forex, indices, commodities, crypto, stocksUp to 100% split, infinite scaling, loyalty rewards, 35+ crypto, fast payoutsSimulated trading, higher fees for add-ons, USD/crypto withdrawals only
TopstepFutures-only, Structured$50K–$150K$49–$149/month100% first $10K, then 90%Weekly, after 5 winning daysTopstepX, NinjaTrader, TradingViewFutures (indices, commodities, FX, ags)Established firm, 100% first $10K, strong community, coaching, reliable payoutsPlatform lock-in, strict rules, drawdown resets, only futures
Apex Trader FundingFutures, Automation-friendly$25K–$300K$167–$657/month100% first $25K, then 90%On-demand after 8 daysRithmic, Tradovate, NinjaTraderFutures (indices, commodities, metals)Massive payouts, automation allowed, multi-account scaling, no daily drawdownHigh monthly fees, strict news bans, evaluation resets add up
Funder TradingStocks & Options, Education-focusedUp to $250KChallenge/subscription100% up to $6K, then 80/20On-demand, after challengeProprietary platformStocks, optionsOptions funding, live coaching, beginner-friendly, strong supportOnly stocks/options, no futures/forex, challenge fees can add up

Firm Profiles: Pros and Cons

DNA Funded

Business Model: Broker-backed, remote, multiple challenge types (Single Helix, Double Helix, Rapid, Instant Funding). Partnered with DNA Markets (ASIC regulated).

Fees: $49–$1,209 one-time, add-ons for early payout and higher split.

Profit Split: 80% standard, upgradeable to 90% with add-on.

Platforms: TradeLocker (TradingView integration), DXTrade.

Asset Classes: Forex (majors, minors, exotics), indices, commodities, stocks, crypto (except Rapid Challenge).

Pros:

  • Tight spreads (EUR/USD 0.0 pips)
  • Flexible challenge options
  • Up to 90% profit split
  • 800+ financial markets
  • Scaling and promotions
  • Reliable broker backing

Cons:

  • No EAs (manual trading only)
  • Crypto trading not available in Rapid Challenge
  • Basic educational resources at launch

BrightFunded

Business Model: Remote, unlimited scaling, two-phase evaluation, instant funding options.

Fees: €55–€1,824 one-time, add-ons for faster payouts, higher split, swap-free accounts.

Profit Split: 80% standard, up to 100% after third scale-up.

Platforms: cTrader, DXTrade, MetaTrader 5.

Asset Classes: Forex (49 pairs), indices, commodities, stocks, 35+ cryptocurrencies.

Pros:

  • Up to 100% profit split
  • Infinite scaling potential
  • Loyalty rewards (Trade2Earn)
  • Fast bi-weekly payouts
  • Advanced platforms, EAs allowed
  • Strong community and support

Cons:

  • Simulated trading environment
  • Higher fees for add-ons
  • Withdrawals only in USD or crypto

Topstep

Business Model: Futures-only, structured evaluation (Trading Combine), proprietary platform.

Fees: $49–$149/month, $149 activation fee, platform/data fees.

Profit Split: 100% of first $10K, then 90%.

Platforms: TopstepX (TradingView integration), NinjaTrader, Tradovate.

Asset Classes: CME futures (indices, commodities, metals, ags, FX).

Pros:

  • Established reputation (since 2012)
  • Generous first $10K payout
  • Strong coaching and community
  • Reliable, fast payouts
  • No time limits in evaluation

Cons:

  • Platform lock-in (TopstepX for new accounts)
  • Drawdown resets after payouts
  • Strict rules (consistency, contract limits)
  • Only one live funded account at a time

Apex Trader Funding

Business Model: Futures-focused, automation-friendly, one-step evaluation.

Fees: $167–$657/month, includes platform/data fees.

Profit Split: 100% first $25K, then 90%.

Platforms: Rithmic, Tradovate, NinjaTrader, WealthCharts.

Asset Classes: Futures (indices, energies, metals).

Pros:

  • Massive payouts ($598M+ since 2022)
  • Automation and bots allowed
  • Multi-account support (up to 20)
  • No daily drawdowns, flexible hours
  • Fast, on-demand payouts

Cons:

  • High monthly fees for larger accounts
  • Strict news strategy bans
  • Evaluation resets can add up
  • Some payout delays in non-US regions

Funder Trading

Business Model: Stocks and options only, education and coaching included.

Fees: Challenge/subscription fees, coaching included.

Profit Split: 100% up to $6,000, then 80/20.

Platforms: Proprietary platform.

Asset Classes: Stocks, options.

Pros:

  • Only prop firm offering options funding without certification
  • Live coaching and education for all traders
  • Beginner-friendly, strong support
  • Responsive U.S.-based customer service

Cons:

  • Limited to stocks and options (no futures, forex, crypto)
  • Challenge fees can add up if multiple attempts needed
  • No access to other asset classes

How to Evaluate and Choose a Prop Firm: Checklist

Selecting the right prop firm is critical for long-term success. Consider the following criteria:

  1. Capital allocation: How much buying power will you receive after passing the evaluation?
  2. Profit split: Is the split fair and transparent? Are there scaling opportunities?
  3. Drawdown limits: What are the daily and total drawdown rules? Can your strategy survive within these limits?
  4. Platform compatibility: Does the firm support your preferred trading platform and execution style?
  5. Fee structure: Are fees reasonable and transparent? Watch for hidden costs (data, platform, withdrawal).
  6. Asset class support: Does the firm offer the instruments you trade (forex, stocks, futures, crypto)?
  7. Regulatory compliance: Is the firm registered or compliant with U.S. regulations? Is the broker regulated?
  8. Community and support: Is there an active trader community and responsive customer service?
  9. Contract terms: Review profit split triggers, termination clauses, non-compete, and confidentiality agreements.
  10. Payout reliability: Are payouts fast, consistent, and well-documented by other traders?
  11. Training and mentorship: Does the firm offer educational resources, coaching, or mentorship programs?
  12. Trader reviews: Check independent platforms (Trustpilot, Reddit, Discord) for real trader experiences.

Pro tip: Choose a firm whose rules and structure fit your trading style, not just the highest payout or flashiest marketing.

Case Studies: Trader Experiences and Payout Examples

Real-world payout data from leading firms shows a wide range of outcomes:

  • Phidias Propfirm: Entry-level traders earn $2,000–$3,200/month; mid-level $4,000–$4,800; advanced $5,000–$6,400; elite $9,600–$24,000/month. Top performers scale multiple accounts for exponential growth.
  • Apex Trader Funding: Over $598M paid out since 2022, with average monthly payouts of $15.4M. Pass rates for evaluations are 15–20% on first attempt, rising to 40% with resets. Fast withdrawals (1–4 days) and automation support are praised by users.
  • Topstep: 100% payout on first $10K, then 90%. Reliable weekly payouts and strong coaching community. Drawdown resets and strict rules require discipline, but many traders report consistent success.

Industry-wide, only 5–10% of traders pass evaluations, and just 7% receive payouts, highlighting the importance of risk management, discipline, and choosing the right firm.

Pros and Cons of Joining a Prop Firm for Retail Traders

Pros:

  • Access to significant capital without personal financial risk
  • High profit-sharing opportunities (up to 100%)
  • Structured risk management and discipline
  • Scaling plans for account growth
  • Advanced trading platforms and market access
  • Mentorship, education, and community support

Cons:

  • Strict trading rules and drawdown limits
  • Evaluation fees and profit splits reduce total earnings
  • Psychological pressure to perform and meet targets
  • No ownership of the trading account
  • Risk of account termination for rule breaches
  • Limited control over trading environment and platform choice

Prop trading is ideal for skilled traders lacking capital, careful risk managers, and ambitious learners seeking professional standards.

Future Trends and Regulatory Outlook for Prop Firms (2026 and Beyond)

The prop trading industry is entering a new era of increased regulation, transparency, and technological innovation:

  • Regulatory tightening: CFTC, SEC, FCA, and ASIC are moving toward mandatory licensing, stricter KYC/AML checks, and standardized profit split disclosures. CTA classification for evaluation-based firms is likely, with capital adequacy and audit requirements.
  • Industry consolidation: Smaller, undercapitalized firms may exit the market; major players will dominate.
  • Hybrid models: Prop firms will partner with regulated brokers, focusing on trader education and evaluation.
  • AI-driven risk management: Automated systems will monitor for banned strategies, risk breaches, and payout verification.
  • Expansion of asset classes: More firms will support multi-asset trading, including options, crypto, and alternative investments.
  • Emphasis on sustainable and ethical trading: ESG criteria and transparency will become more important.
  • IRS crypto reporting: Mandatory transaction reporting and expanded broker definitions will affect payout and tax compliance for U.S. traders.

Traders are advised to prioritize firms with clear regulatory compliance, transparent terms, and robust support for long-term success.

Summary of Key Takeaways

  • Proprietary trading allows skilled traders to access firm capital, trade diverse markets, and share profits without risking personal funds.
  • Prop firms operate via evaluation challenges, funded accounts, and profit-sharing models, with strict risk management and scaling opportunities.
  • Types of prop firms include remote, in-house (traditional), and hybrid models, each with unique advantages and limitations.
  • Top U.S. prop firms (DNA Funded, BrightFunded, Topstep, Apex Trader Funding, Funder Trading) offer competitive splits, diverse platforms, and tailored asset support.
  • Regulatory environment is evolving, with increased oversight from SEC, CFTC, FINRA, and state agencies. Compliance, KYC/AML, and tax reporting are essential.
  • Choosing a prop firm requires careful evaluation of capital allocation, profit splits, drawdown rules, platform compatibility, fees, and contract terms.
  • Trader success depends on discipline, risk management, and matching firm rules to trading style. Only a small percentage of traders pass evaluations and receive payouts.
  • Future trends point to greater regulation, technological innovation, and industry consolidation, with AI and hybrid models shaping the next generation of prop trading.

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