Ever felt lost when reviewing profit split offers from proprietary trading firms? Maybe you’ve seen “80/20 splits” or “scaling plans” thrown around, but have no idea what actually gets credited to your account at the end of the month. This article cuts through the marketing fluff and, drawing on real trader stories, forum debates, and official documents, explains how profit sharing is structured at leading prop firms. I’ll also show you what can go wrong (yes, even after you pass those grueling challenges), compare the rules across countries, and let you in on what to watch for in the fine print.
Let’s get practical. When I first started exploring prop firms, I got pulled in by flashy ads promising “Keep up to 90% of your profits!” But the real numbers, as it turns out, depend on the type of firm and your contract. There are two big worlds: traditional in-house prop firms (think Jane Street, SMB Capital, Tower Research) and the now-ubiquitous online “funded account” simulators (FTMO, MyForexFunds, TopStep, etc).
Traditional prop firms rarely advertise their splits. Their traders are usually salaried or on a base plus bonus, and the split can range from 30/70 to 50/50 (firm/trader), according to Wall Street Oasis. Remote, challenge-based prop firms like FTMO, on the other hand, market high splits (80% or more to the trader) because you’re trading simulated capital and paying upfront for the chance.
My first real prop firm experience was with a remote firm. Here’s what actually happened:
So, the “split” only came into play after all these hurdles. And if you lose or break a rule, you’re out—no payout.
Let’s get into the numbers. Most top online prop firms offer something like:
But here’s the twist: the split is always on net profits—that is, profits after commissions, fees, and sometimes even after a “buffer” for risk or drawdowns. So if you made $10,000 in a month, but racked up $2,000 in commissions and $500 in “data fees,” your split is on $7,500 (sometimes even less if the firm holds back a risk reserve).
One thing I learned the hard way: some firms only pay out monthly (like FTMO), while others have “two-week windows” (TopStep). You might also have to request a payout, and if you forget, the profits roll over.
There are also minimum withdrawal thresholds—some as high as $1,000. So if you made $900, you get nothing. I once spent a month grinding only to realize my net profit was $980 after commissions, missing the threshold by $20.
Some firms market “scaling plans”—if you consistently hit targets without breaking rules, you can access larger accounts and sometimes better splits. For instance, FTMO bumps you from 80% to 90% if you’re profitable for 4+ months. But, in practice, most traders never get there: data from Trading Riot suggests fewer than 10% of funded traders ever qualify for scaling.
Not all profit splits are created equal. In the US, the CFTC recently cracked down on several firms for misleading statements about live trading and payout processes. In the UK and EU, the FCA and ESMA require prop firms to clearly disclose fee structures and payout terms, and registered firms must provide dispute resolution options (FCA Register).
I’ve seen posts on r/Daytrading where traders passed challenges, but got their accounts closed before payout—sometimes for “risk violations” that seemed arbitrary. Always read the fine print, and check if the firm is registered with a credible authority in your jurisdiction.
Let’s shift gears for a second. Different countries have different standards for what counts as a “verified trade” for compliance and payout purposes. Here’s a comparison table to make things clearer:
| Country | Name of Standard | Legal Basis | Enforcement Agency |
|---|---|---|---|
| United States | CFTC Verified Trades | CFTC Act, Section 4(b) | CFTC |
| European Union | MiFID II Trade Verification | MiFID II Directive 2014/65/EU | ESMA, National Regulators |
| United Kingdom | FCA Verified Execution | FSMA 2000, FCA Handbook | FCA |
| Australia | ASIC Trade Confirmation | Corporations Act 2001 | ASIC |
Depending on the country, the requirements for “verified” trades can affect whether your profits are eligible for payout—and whether the firm gets in trouble for non-payment. For example, in the US, the CFTC can require firms to prove that all paid-out profits are from “bona fide” trades, not just simulated results (source).
Imagine a trader in Germany passes a challenge at a US-based prop firm. The firm demands extra documentation to prove the trades were executed according to MiFID II standards. A delay ensues, and the trader posts on a forum complaining about withheld payouts. The firm, citing CFTC rules, insists on additional proof. This is more common than you’d think—I've seen similar disputes on Trade2Win.
I once interviewed a senior risk manager at a major London prop firm (they asked not to be named, but anyone in the City can guess which). Their take: “The advertised split is just the headline. What matters is the effective split after costs, risk buffers, and compliance. If you’re not reading the payout clauses, you’re not really trading for yourself—you’re trading for the firm’s marketing department.”
Having navigated multiple prop firm structures myself, I’ve learned to look beyond the marketing. The actual money you receive depends on a web of rules, fees, and compliance checks. Always, always read the payout policy and check for minimum withdrawal limits, risk buffer deductions, and regulatory status. Don’t be afraid to ask for proof of live trading or regulatory registration—the best firms will provide it.
If you’re new, start with a small challenge and treat it as tuition. If you’re going international, research the “verified trade” requirements in your country and the firm’s. And don’t get discouraged if your first attempt doesn’t work out—I’ve had my share of failed challenges, missed payouts, and lessons learned the hard way.
For more on legal standards and firm registration, always check the latest from the CFTC, ESMA, or your local regulator.