Best Proprietary Trading Firms in 2024

Prop trading, short for proprietary trading, is a type of trading where a financial firm or individual trader trades for its own account rather than on behalf of clients.

In prop trading, the trader uses the firm's capital to take positions in various financial instruments, such as stocks, bonds, commodities, futures, options or currencies, in the hope of generating profits.

Prop trading can be done by various types of firms, such as investment banks, hedge funds or proprietary trading firms.

There are hundreds of prop trading firms across the globe, all with advantages and disadvantages.

A List of the Top Prop Trading Firms for October 2024 Are:

1. FTMO
2. Lux Trading Firm
3. DreamTicks
4. Audacity Capital
5. IG
6. The Funded Trader Program
7. SurgeTrader
8. The 5%ers
9. Fidelcrest
10. City Traders Imperium
11. 3Red Partners
12. Akuna Capital
13. Belvedere Trading
14. The Trading Pit
15. My Forex Funds
16. FundedNext

Comparision Table of the Best Prop Trading Firms for October 2024:

Description of the Best Prop Trading Firms for October 2024

Best for: Security
Maximum capital allowance: $400,000
Leverage: 1:100
Fees: Starting at £155

FTMO was founded in Prague in 2014 and has a two-step evaluation process called the FTMO Challenge and Verification course.

The company also provides performance coaches and excellent customer service.

It offers trading in forex, stocks and bonds. Its scaling plan gives a 25% balance limit increase every four months.

Best for: Social trading
Leverage: 1:100
Fees: Between £299 and £499, depending on the amount you start with and refunded after stage 1.

Lux Trading is a London-based proprietary trading firm founded in 2021. Like many of the new prop trading firms, there is not enough data to confirm the trustworthiness of the company.

Traders work through stages, from one to eight, progressing when they reach a 10% target. Lux Trading offers trading in commodities, crypto, forex, indices and stocks.

There is a large element of social trading, with chat rooms and trading rooms open for idea-sharing and feedback.

Best for: Funded programmes
Leverage: 1:5
Fees: £199 joining fee and £99 monthly fee

Audacity Capital was founded in 2012 in London and has traders all over the world.

It doesn’t have a typical evaluation process. Instead, traders apply for a role and are invited for an interview.

Successful traders choose between the Hidden Talents programme or the Funded Trader programme. The first is designed for traders with a natural ability but no experience, and the latter for experienced traders with a three-to-six-month track record.

% of Profits Retained: 80-90%
Leverage: Up to 1:60
Customer Service: Excellent

DreamTicks is a Maltese-based company founded in 2023. Its founders have long and proven track records from diverse backgrounds, including profitable day trading, executive roles in the regulated online gambling industry, and leadership in a global Tier One FX broker.

Offering personal onboarding, English and Spanish customer support, and limitless challenge resets, DreamTicks focuses on customer satisfaction and long-term engagement.

DreamTicks offers great spreads, and Traders can experience real market conditions with real money, proving the authenticity and financial robustness of their offerings.

IG invented spread betting in 1974 and today is the world’s leading online trading provider with more traders trusting them with their money than anyone else

IG is authorised and regulated by the FCA and provides traders access to over 18,000 markets. IG offers more 24-hour indices than any other provider, and extended hours on over 70 key US stocks 

For those who prefer to own the underlying asset, IG offers access to over 13,000 global shares and ETFs, or a wealth portfolio managed by one of their experts. 

Benefits:

• Advanced platform and charting – L2 dealer, ProRealTime and MT4
• Demo account
• Extended trading hours
• Extensive range of products
• Daily expert analysis & educational resources
• Round-the-clock customer service
• Negative balance protection for retail clients

Based on revenue (published financial statements, October 2022). 24/7 excludes the hours from 10 pm Friday to 8 am Saturday (UK time), and 20 minutes just before the weekday market opens on Sunday night. 

Best for: Relaxed trading rules
Maximum capital allowance: $1.5m
Leverage: Up to 200:1
Fees: $315 for $50,000 account size

The Funded Trader Program is an online prop trading firm founded in Texas in 2021.

As it is so new, there is no historical data to confirm if the firm is reliable and trustworthy.

It offers three different accounts – Standard, Rapid and Royal Challenge – which traders progress through during their trading evolution.

Traders can take home profit splits of up to 90% and can trade in forex, commodities, crypto and indices.

The trading rules are very simple to follow and traders are allowed to trade on the weekends when they reach the Royal Challenge.

Evaluation periods are 35 and 60 days, and traders are rewarded for consistency.

Best for: High trade amounts with few restrictions
Leverage: 10:1 for forex, metals and indices, 5:1 for stocks and 2:1 for crypto
Fees: Between $250 and $6,500 depending on the package you choose

SurgeTrader was established in Florida in 202, meaning it doesn’t have enough of a track record to state whether it is reliable or not.

There is a one-time audition process that is reported to have strict standards.

SurgeTrader also offers lots of trading options, including oils, metals, crypto, forex, stock and indices.

As a trader, you start on the intermediate account before moving to seasoned, advanced and, finally, expert.

Best for: Forex traders
Leverage: 1:30 or 1:6, depending on the model
Fees: Instant: €235; Freestyle: €285; $100k Bootcamp accounts: €85

The 5%ers was founded in 2014 and is based in Israel. Its goal is to facilitate the growth and success of forex traders.

There are three packages: Instant, Bootcamp and Freestyle. The Freestyle package allows for 100% profit, Instant 50% and Bootcamp 80%.

Once you have completed one of these challenges, you have access to unlimited funding.

Best for: Crypto
Leverage: 1:100
Fees: Between €649 and €1,599, depending on the account and funding

Fidelcrest was founded in Cyprus in 2018 and has a two-step evaluation process lasting 60 days.

If you are successful, there are two trading programmes: Micro Trader and Pro Trader.

Best for: Gold and indices
Leverage: 1:10
Fees: From £109 to £640 for evaluation accounts and £109 to £3,099 for funded and forex funded accounts.

Based in London, City Traders Imperium was founded in 2014.

Traders can trade forex, gold, indices and shares.

There is a one-year evaluation process where successful traders can earn a 400% reward. However, that process can be skipped if you have the record to prove your trading ability.

Best for: Advanced tools and resources

Very little information regarding profits and leverage is available for 3Red Partners.

What is known is that this Chicago-based company uses high-frequency trading platforms and specially created algorithms to read and interpret data, allowing traders to make well-informed trades.

Similar to 3Red Partners, there is very little information about the prop trading firm.

It is another Chicago-based company, founded in 2011, and has a revenue of $100m to $500m.

Best for: Forex trading

As is the trend with most Chicago-based proprietary trading firms,there are very few details on Belvedere Trading’s leverage, profit split and trading programmes.

It was founded in 2002 and has a revenue of $16.58m, so it can be considered trustworthy, and it is obviously doing something right.

Its strength is the market-making trades, and it trades in indices, interest rates, energies, grains, softs, metals, equity index and commodities.

Best for: Clear direction and scaling plan

The Trading Pit was founded in Cyprus and offers its best traders the chance to earn an official certification and become a fund manager.

It has an evaluation process where you need to prove your trading skills. Once you pass, you go on to become a Funded and Scaling Trader before finishing as a Trading Pit Expert.

Best for: Skipping the evaluation process
Leverage: Up to 200:1
Fees: Registration fee between $499 to $2,450

MyForexFunds was founded in 2020 in Canada and has a two-step evaluation process that you can skip if you have enough experience.

It offers instant funding and provides customisable funding programmes.

Best for: Relaxed trading rules
Leverage: 10:100

FundedNext is a new proprietary trading firm that operates out of the UAE, Bangladesh, UK and the US. Its partner broker firm is regulated by the Australian Securities and Investments Commission (ASIC), so the company does have a level of trust and reliability.

It offers low commissions and spreads and works with forex, indices and commodities.

Once you complete the two-step evaluation, the goal is simple: pick your funding model, stay profitable and get more funding.

What Is a Proprietary Trading Firm?

Also known as prop trading, a proprietary trading firm is a financial company or commercial bank that recruits professional traders to make direct market gains.

A prop trading firm does not make trades on behalf of a client.

The capital for these trades is generated from the company or bank and used for trading in numerous assets including:

• Stocks
• Bonds
• Forex
• Cryptocurrencies
• Indices
• Futures
• Commodities

It is also common for proprietary trading companies to specialise.

Traders who are hired by these companies are trained to earn profits. All profits made by the trader are split between the trader and the company.

To facilitate a trader’s success, the firm offers support by way of training, retraining, coaching, providing professional trading tools and more.

There are often stringent rules traders must follow, designed to encourage better profit levels and reduce losses.

When hiring, the best proprietary trading firms will start the recruitment process with a staged evaluation. This includes using a test account. These accounts prove whether or not traders have the skills required for the role.

Some trading companies will offer commission or profit splits during the evaluation, but others don’t.

Types of Proprietary Trading Firms

There are several types of proprietary trading firms, each with their own unique characteristics and strategies.

Here are some more details about the different types of prop trading firms:

• High-Frequency Trading (HFT) Firms – These firms use complex algorithms and high-speed technology to execute trades in milliseconds or less. The goal of HFT firms is to take advantage of small price discrepancies in the market that may only exist for a fraction of a second.

• Quantitative Trading Firms – These firms use mathematical models and statistical analysis to make trading decisions. They typically have a team of mathematicians, physicists, and computer scientists who develop these models and algorithms.

• Market Making Firms – These firms provide liquidity to the market by buying and selling securities and derivatives. They typically make money by earning the spread between the bid and ask prices of the securities they trade.

• Discretionary Trading Firms – These firms rely on the expertise of experienced traders to make trading decisions based on their analysis of market conditions. They may use a combination of technical and fundamental analysis to make their trades.

• Event-Driven Trading Firms – These firms specialize in trading securities based on events such as earnings reports, mergers and acquisitions, and economic indicators. They analyze these events and try to predict how they will affect the market.

• Arbitrage Trading Firms – These firms make profits by taking advantage of price discrepancies between different markets or securities. For example, they may buy a security on one exchange where it is undervalued and simultaneously sell it on another exchange where it is overvalued.

• Multi-Strategy Trading Firms – These firms use a variety of trading strategies across multiple asset classes to diversify risk and maximize returns. They may use a combination of the strategies mentioned above, as well as other strategies such as trend following and mean reversion.

Benefits of Proprietary Trading Firms

Choosing the best proprietary trading firm for you can take time, but there are lots of advantages, such as:

• Most firms offer funded trading, meaning you don’t need a large amount of capital investment. Often only a registration fee is needed.
  
• Prop trading companies also often offer lots of training and retraining, with some encouraging social trading.
  
• You have access to professional tools, information and top-level data software at either a reduced rate or no cost.
  
• Prop Traders have access to the exchange
  
• You don’t have to worry about conflicts of interest between companies and traders.

Drawbacks of Prop Trading Firms

Here are some potential drawbacks of prop trading firms:

• Prop trading firms often take on higher levels of risk than other types of financial firms, which can lead to significant losses in volatile market conditions.
• The profitability of prop trading firms is highly dependent on market conditions, which can change rapidly and unpredictably.
• Prop trading firms may have limited diversification, as they may focus on a narrow range of financial instruments or trading strategies.
• Prop trading firms may be less transparent than other types of financial firms, as they may not have to report their trades to regulatory authorities.
• Prop trading is a highly competitive industry, and traders may face intense pressure to generate profits.
• Prop trading firms require significant amounts of capital to operate, which can make it difficult for new firms or traders to enter the industry.
• Prop trading firms may have high overhead costs, such as technology infrastructure and compensation for traders.
• Prop traders may have limited exit opportunities, as the skills and expertise required for prop trading may not be easily transferable to other industries.

How to Choose a Proprietary Trading Firm

Before selecting and applying to a prop trading firm, you need to assess the pros and cons of each and decide which is the best one for you.

When evaluating the firms, consider:

• Reputation – Check that the firm is profitable and reliable within its niche. This may take some lengthy research, and you may want to speak to other traders. TrustPilot is a great place to get started, as is Reddit and Quora. Those companies that are the most trustworthy are more transparent with company happenings.

• Available Assets – Check which assets can be traded with each platform/company. If you want to specialise in just forex, then opt for a firm that has the resources for that. If you want to trade in all assets, you will need to find one that has a wide variety.

• Fees – There are going to be fee structures. Sometimes this is just a one-off payment for the evaluation procedure. Others have monthly fees and fees for different types of trading.

• Trading Platform – Ensure that the firm has a good trading platform that meets all the requirements. Ideally, you want to be able to test the platform first to ensure you are comfortable with the interface.

• Trading Style – Different firms have different styles and approaches. Some rely on technical analysis, others on fundamentals. There are also some prop trading firms that encourage short-term strategies and others that allow for overnight/weekend holds. Decide what trading strategy you want to adopt and find the firms that accommodate it.

• Customer Support – Customer service is important for working with any firm. Some have better rates of responding, a better reputation or more communication methods.

Hedge Fund vs. Prop Trading

Hedge funds and prop trading are both types of financial firms that engage in trading activities, but there are some key differences between them:

Objective

Hedge funds aim to generate returns for their investors while minimizing risk.

They typically use a variety of strategies, such as long/short equity, global macro, event-driven or relative value, to identify market inefficiencies and make profitable trades.

Hedge funds may also use leverage and derivatives to amplify their returns or reduce their risk exposure.

In contrast, prop trading firms aim to generate profits for their own account.

They typically use a combination of fundamental analysis, technical analysis and other quantitative methods to identify market opportunities and make trades that are expected to be profitable.

Capital

Hedge funds raise capital from external investors, such as high-net-worth individuals, institutional investors or pension funds, and use that capital to invest in various financial instruments.

The amount of capital invested in a hedge fund can vary widely, from a few million dollars to several billion dollars.

In contrast, prop trading firms use their own capital to trade financial instruments.

The amount of capital available to a prop trading firm depends on its size, profitability and risk management policies.

Risk

Hedge funds typically seek to manage risk by diversifying their portfolios and using hedging strategies to reduce exposure to market fluctuations.

They may also use stop-loss orders and other risk management techniques to limit losses.

Hedge funds may also be subject to restrictions on leverage and risk-taking.

Prop trading firms, on the other hand, often take on higher levels of risk, using leverage and other financial instruments to amplify their returns.

Prop trading firms may also be more focused on short-term trading opportunities, which can increase their risk exposure.

Regulation

Hedge funds are subject to various regulatory requirements, such as registration with the Securities and Exchange Commission (SEC) and compliance with securities laws.

Hedge funds may also be subject to regulatory oversight by other agencies, such as the Commodity Futures Trading Commission (CFTC).

Prop trading firms are also subject to regulation, but their activities may be subject to less oversight than those of hedge funds.

Prop trading firms may be subject to regulations related to market manipulation, insider trading and other types of fraud.

Structure

Hedge funds typically have a management fee and a performance fee, and their investors may have restrictions on withdrawing their funds.

The management fee is typically a percentage of the assets under management, while the performance fee is typically a percentage of the profits generated by the hedge fund.

Prop trading firms may have a different compensation structure, such as profit-sharing agreements or bonuses based on performance.

Prop trading firms may also be more focused on short-term profits, which can lead to a different compensation structure.

Overall, hedge funds and prop trading firms have different objectives, sources of capital, risk profiles, regulatory requirements and compensation structures.

While both involve trading financial instruments, they are distinct types of financial firms.

Inspired to become a prop trader after reading this article? Here are our tips to help you get started.

Remember, becoming a prop trader requires dedication, hard work and a willingness to take risks.

It may take time to build up the necessary skills and experience, but with persistence and determination, you can achieve your goals.

Frequently Asked Questions

Final Thoughts

Proprietary trading, like all trading, comes with a lot of risk and caution should be taken when making trades.

A large number of the best prop trading firms have stop-loss and minimum profit loss rules in place to minimise damage.

That being said, if you have the knowledge and talent for trading, then this can be a lucrative career option.

Before committing to one firm, remember that there are hundreds of firms across the globe and some are better than others. Do your research, check the trustworthiness of the firm and confirm that it supports your trading style.

WikiJob does not provide tax, investment, or financial services and advice. The information is being presented without consideration of the investment objectives, risk tolerance, or financial circumstances of any specific investor and might not be suitable for all investors. Past performance is not indicative of future results. Investing involves risk including the possible loss of principal.