Payouts | Smart Prop Trader (2024)

FAQs

Payouts | Smart Prop Trader? ›

Payout System

Profit share: Some prop trading firms have a profit-sharing model where a portion of the firm's profits is distributed among its traders. This can be a significant source of income for successful traders.

The Virtual Profit Split Day can be changed up to 3 times for each withdrawal, anytime between 12 days and 60 days from the start of trading. The payouts are processed within 1-2 business days upon confirming the invoice.

Statistics on Average Trader Payouts

Profit Split: The average prop firm will offer a 80-20 profit split once you become a funded trader. TFT, on the other hand, gives up to a 90% split, — even as high as 95% in some promotions — the highest in the industry.

While it's true that there have been instances of fraudulent prop firms, it's important to note that legitimate prop trading firms do exist, and they indeed pay traders based on their performance. It's crucial to thoroughly research and choose reputable firms with a proven track record.

Proprietary trading firms often provide evaluation accounts where you prove your trading skills. Usually, you pay a one-time fee to enter this "challenge." If you lose money during this evaluation, you won't owe anything beyond the initial fee.

Prop trading can be highly stressful due to the fast-paced nature of markets and the pressure to make split-second decisions. Working in the financial markets as a prop trader comes with a series of demanding hurdles. Such traders face an environment filled with: Intense rivalry.

Since proprietary trading uses the firm's own money rather than funds belonging to its clients, prop traders can take on greater levels of risk without having to answer to clients.

While prop trading is one of the most profitable opportunities, it is affected by asymmetric risk. This means that the profit-sharing ratio may be from 75% to 90%, but you bear 100% of the risk of your trades. When becoming a prop trader, you often need to deposit an amount of money known as your risk contribution.

Do proprietary trading firms need a license? Prop trading firms are less heavily regulated than regular brokerages and broker-dealers. However, it depends on the way the prof firm choose to open their business. If them choose to open a firm only with trader challenges, there's no license needed.

What are the negatives of prop firms? ›

According to FTMO statistics, only about 10% of traders are able to pass the funded account challenge at any account level. This means approximately 90% of aspiring funded traders fail the evaluation and are unable to gain access to the firm's capital.

Schedule C net income is subject to federal and state income taxes… That net income is deemed “earned income” subject to the self-employment (SE) tax. They can deduct health insurance and retirement plan deductions.

There is estimated to be a 90% fail rate of traders that take the FTMO challenge. The reason behind this is due to traders chasing the profit target with a time restriction in place. A trader doesnt know when a winning streak might occur, or when they may take a string of drawdowns.

Funding Pips and Maven lead the rankings with the most frequent pay-outs, offering transactions every 5 days. Close behind, Traddoo and Funded Trading Plus offer weekly pay-outs. Smart Prop Trader, with its 12-day pay-out cycle, caters to those with a trading style that can accommodate less frequent access to funds.

Overview: Apex Trader Funding is the best futures prop trading firm on this list for a variety of reasons, but most notably because it boasts the highest pass rate for its evaluation program out of all the futures prop firms on this list. It is also by far the most friendly option for beginner futures traders.

How much does an Entry Level Proprietary Trader make? As of Apr 23, 2024, the average annual pay for an Entry Level Proprietary Trader in the United States is $112,369 a year.

Profit Splits and Targets

Agreements typically range from 50/50 to a more favorable 80/20 split after certain thresholds, with some firms offering as much as 90% to the trader.