How Proprietary Trading Firm Profit Splits Actually Work – A Real-World Guide
If you’ve ever wondered “How do prop firm profit splits really work?”—or you keep seeing all these ads about “up to 90% payout!”—let me break it down honestly, based on hands-on experience and real stories from traders like us. We’re talking about what you, as a funded trader, actually get to keep, what rules and hoops there really are, and how industry-leading prop firms like FTMO, MyFundedFX, and The5ers compare. This isn’t some theoretical thing—I’ll share my own trial, missteps, and what you actually see after withdrawal time. We’ll even touch on the sometimes-crazy international “verified trade” headaches and what major regulators (like the USTR or OECD) have to say.
By the end, you’ll know how profit splits actually work, which firms are trustworthy, why “up to 90%” isn’t always the whole story, and what to check before you waste time or get blindsided by a payout delay—or worse, an unexpected rule violation.
Step 1: Understand the Basic Prop Firm Model
First, let’s get straight what a prop trading firm is. It’s basically a company that lets you trade their capital (not just your own) if you pass their “challenge” or evaluation. In return, you get to keep a share of the profits you earn. The common hook? The “profit split ratio.”
Example: You pass MyFundedFX’s $50,000 challenge—maybe after a few “ugh, why did I hold that loss overnight” moments like me. Then, you make $2,000 profit in a month. With an advertised 80% split, you’d think you pocket $1,600. But—here’s where it gets fun—there are always rules, fees, minimum withdrawal amounts, and sometimes, sudden recalculations.
Step 2: Types of Profit Split Arrangements (with Real Examples)
There are two big models:
- Static split: Once you’re funded, the split is set (e.g., 80/20 or 90/10, trader/firm).
- Progressive split: Starting lower, your split increases over time or as you hit milestones. (Often used by The5ers and similar firms.)
Most well-known firms like FTMO, MyFundedFX, and FundedNext claim “up to 90%” or "80%" splits. Let me show you an actual screenshot—here’s one from my FTMO dashboard after my second payout:
That $2,000 profit? After FTMO’s 20% cut, EUR:USD conversion (always worse than Google says…), and a $30 wire transfer fee, my payout finally hit €1,560 in my bank. Not bad, but less than the “math on paper."
What tripped me up once—on another account—was a scaling model. MyFundedFX, for example, bumps you from a 75% profit split to 80% if you go three months without violation or loss (per their FAQ: source). The catch? If you breach a minor rule, you reset back to the lowest level. They don’t put that in the big bold print.
Profit Split Comparison Table: Top Firms (2024)
| Firm | Default Split | Upgradable? | Payout Frequency | Notable Rules |
|---|---|---|---|---|
| FTMO | 80% | Yes (can reach 90% after 4 months, no violations) | Monthly, can request bi-weekly after 1st payout | No weekend holding, strict SL use |
| MyFundedFX | 80% | Yes, up to 85% | Bi-weekly | Trading days minimum, breach = reset split |
| The5ers | 50%-70% (growth model) | Yes, with account scaling | Monthly | Swing/day trading, tight rules |
| FundedNext | 80% | Yes, up to 90% | Bi-weekly to monthly | No news trading, scaling model tiers |
Practical lesson: always ask the firm, on record, how splits, resets, and payout timing really work. I once misread a clause and missed a $300 payout because I requested too soon (MyFundedFX: see their requirement here payout terms).
Hidden Gotchas: Rules, Fees, and When You Really Get Paid
Here’s where most new traders (me, included, in my first two months) get tripped: the rules. “Profit split” only applies if you don’t breach limits (like daily loss, overall drawdown, holding over weekends, etc.). Some firms, like FTMO, are relatively transparent; others hide rule-breaking in fine print.
- Withdrawal minimums: Some firms won’t pay out unless you have $100+ profits (or higher).
- Verification delays: If you fail random identity or trade checks, payouts can be held for days.
- Conversion rates: If your account is in USD and you withdraw in EUR or crypto, expect a fee (and an exchange rate that stings!)
Here’s a murky thing I found on Discord—the screenshot below shows someone waiting 9 days for a withdrawal from FundedNext, finally got paid after emailing support 3 times. (Source: real trader Discord chat)
So don't just look for the “highest split.” Check payment speeds and reviews on Trustpilot or Reddit before you start.
Regulatory Angles and “Verified Trade” Issues (International Differences Table)
Here’s something I found especially interesting after trying to cash out in different countries. Some regulators have specific rules on trader “fund verification” (often called “verified trade”), which can affect who gets paid or how profit splits are enforced. Check out this comparative table:
| Country/Org | Standard Name | Legal Basis | Agency | Key Differences |
|---|---|---|---|---|
| US (CFTC/NFA) | Customer Due Diligence (CDD) | CFTC Rule 3.10, NFA rules (NFA Rulebook) | CFTC, NFA | Strict ID checks, withdrawal limits for flagged accounts |
| EU | AML/KYC, MiFID II Compliance | MiFID II, GDPR (MiFID II) | ESMA, national regulators | Data privacy, occasional payout freezing for review |
| UK | FCA “verified funds” | FCA Handbook | FCA | Firms must prove all payouts come from actual profits (not ponzi-style pooling) |
| Australia | AFSL” (Australian Financial Services Licence) rules | ASIC requirements (ASIC) | ASIC | Frequent trade verification audits |
Case in point: I tried getting a first payout at The5ers while in Germany—got stuck in an ID loop for almost two weeks! Turns out, thanks to MiFID II (link above), they have to double-check the “source of funds” for any “large” withdrawal. Meanwhile, my trading buddy in the UK had his FTMO payout flagged for review under FCA’s client money rules. Funny enough, a US trader in the same Discord group reported no issues, just a straight payout after routine KYC.
An industry expert, David Knott, who works with UK brokerage compliance teams, once joked, “If you’ve cleared KYC once, keep every document handy forever. If you’re trading with prop firms across borders, imagine doing KYC twice… for every withdrawal.”
It’s a paperwork dance. So if you ever dream of that “easy payout,” be ready for some verified trade fun—it’s not just about how well you trade.
Summary & Next Steps: Picking and Profiting from the Right Prop Firm
So—what’s the real scoop? Prop firm profit splits sound straightforward but are peppered with rules, levels, hidden fees, and (sometimes) slow payouts triggered by international compliance. Don’t just chase the advertised split. Actually read reviews, check payout history (Reddit and Trustpilot save time!), and test customer support first. Personally, after three withdrawal cycles, I now double-check the terms (and my KYC docs!) before ever risking a funded account.
My main advice: Start small, always verify payout conditions, and never let profit split percentages waste more of your life than your actual trading setups. You can make good money—just don’t be shocked by the (sometimes) frustrating admin grind.
If you want to dig into regulations, legit profit splits, or just share your prop firm battle stories, check out the /r/propfirm forum or read deeper via official docs: OECD glossary or USTR site. Trade smart, keep your docs in check, and don’t be afraid to ask support for details before trading real firm funds.