Opening a prop firm in 2024 – all the things you need to know - Leverate (2024)

Opening a prop firm in 2024 – all the things you need to know - Leverate (1)

In today’s financial landscape, there’s a growing interest in trading across various assets, from forex and stocks to cryptocurrencies and indices.

Alongside this surge, proprietary trading has gained huge momentum and has a growing demand, prompting a range of entities, from financial institutions to hedge funds, that want to establish their own prop firms.

But before diving into this venture, it’s crucial to address numerous considerations and questions. By the end of this discussion, you’ll have a clear understanding of what prop firms entail, why the regulation in so simple, the steps to launch one, and the potential benefits that our all-in-one prop trading platform has to your business.

What is a Proprietary Trading Firm?

A proprietary trading firm, often referred to as a “prop firm,” operates by utilizing its own capital to participate in financial markets. These companies specialize in various forms of active trading, including high-frequency trading, with the goal of capitalizing on rapid market movements to generate profits.

Unlike traditional investment firms, prop firms do not handle client funds. Instead, they focus solely on trading their own capital and retain a percentage of the profits generated from successful trades by revenue share.

To become a trader at a prop firm, the firm will typically conduct some auditions during the trader selection process. Proprietary trading firms only choose traders who are highly skilled, and the own’s that passed their challenges by the roles the prop firm choose like maximum daily loss, profit targets by day, Max Overall loss and more.

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. But, if they add a funded accounts to their traders, they will need a brokerlicense.

How much does it cost to set up a prop firm?

It depends on the location and your target market. However, the business model of prop trading accounts.

Most prop trading firms provide access to real funds only after carefully evaluating their traders’ abilities, and traders usually must pay an audition fee before entering the real trading process.
In some cases, proprietary trading firms provide access to live trading for a certain fee, but the funds provided aren’t substantial, and monitored trading metrics are strict.

How do I open my prop firm?

When establishing a proprietary trading firm, you face the decision of developing your technology, which can be both costly and time-intensive, or opting for white-label technology solutions like Leverate’s prop firm platform, which is a ready-made and licensed software product that you can customize and rebrand.

We at Leverate, built a top-notch turnkey solution for prop firm to their kickstart, that contains all what new prop firm need:

Trading Platform

Our trading platform has a super-friendly interface with one-click execution, an intuitive dashboard, and easy access to advanced indicators and chart analysis.

All the features are available on Mobile, Web, and Desktop with a seamless trading.


The backbone of a Prop firm is a powerful CRM. Our CRM is specifically designed for the needs of your Prop firm. The multiple dashboards with full customization, custom reports and tailor-made interfaces allow you to get all the info you need on one page.

Back-End Office

The admin dashboard is designed to present a unified view, intuitive controls, and swift decision-making tools on real-time data.

Security & Encryption

We know how important and sensitive data is. Hence, we emphasize security, ensuring the most secure environment for your clients’ database., ensuring you can focus on developing other aspects of your prop firm.

Risk Management

With our extensive 15 years of experience in the FX industry, we possess a unique advantage in managing risk with precision and finesse.

Broker Integration & Liquidity

Leverate’s software aggregates liquidity from top financial institutions to provide competitive rates and the lowest spreads. Our Tech Team will make a secure and quick integration to any brokerage you need.

Customer Support

We offer round-the-clock, multilingual tech support services to ensure you receive comprehensive assistance whenever needed.

In conclusion, like any other brokerage endeavor, launching a prop firm demands meticulous planning, extensive research, and strict compliance with local regulations. With the appropriate strategy, technology, and risk management plan in place, a prop trading firm stands poised to flourish in today’s market environment.

To streamline the process and access essential tools and integrations affordably, consider a white-label prop trading platform that will lead your firm to success and to reach their goals quickly and efficiently.

If you thought about establishing your prop firm, don’t hesitate and contact us to start your journey as a top-notch prop firm with us.

Opening a prop firm in 2024 – all the things you need to know - Leverate (2024)


What is needed to start a prop firm? ›

How to start a prop trading firm? Starting a prop trading firm requires a reliable white label technology, CRM tool, liquidity, and registration. A white label will give you trading platform alongside a reliable CRM tool.

How much money is needed to start a prop firm? ›

To summarize, the amount of money you need to open a prop firm can range from $10,000 to $1 million, depending on the type of prop firm, the technology, the registration, the liquidity, and the CRM tool.

Are prop firms good for beginners? ›

The short answer is yes, prop firms are great for beginner traders to learn risk management, discipline and grow their trading capital.

What software do prop firms use? ›

DXtrade is a platform for prop trading and trading competitions.

How is prop firm income taxed? ›

You cannot classify as capital gains on trading at a prop firm as you are independent contractor and thus it is self employed income, meaning there is sales tax to be paid when you make declaration of your yearly tax income.

How do prop firms get their money? ›

Commission: Prop firms may charge a commission on each trade made by their traders. Profit Split: In some cases, prop firms may take a percentage of the profits earned by their traders as a form of compensation. Training Fees: Some prop firms offer training programs for new traders, which may come at a cost.

How many people fail prop firms? ›

According to it, 4% of traders, on average, pass prop firm challenges. But only 1% of traders kept their funded accounts for a reasonable amount of time. While this result is not nearly as bad as the one discussed earlier, it still looks bleak for prospective prop traders. But why is the percentage of failure so high?

What is the cheapest prop firm? ›

Cheapest Prop Firms Forex 2024 - with $5K Funding Accounts...
  1. The5%ers. The5%ers specializes in providing funding of up to $100,000 to forex traders. ...
  2. FTMO. ...
  3. MyForexFunds. ...
  4. Earn2Trade. ...
  5. The Funded Trader Program. ...
  6. OneUp Trader. ...
  7. Apex Trader Funding. ...
  8. True Trader.
Feb 27, 2024

How do prop firms pay their traders? ›

A prop trading firm is a company that provides its traders with access to capital. In return, the traders share a percentage of the profits they generate with the company. Individuals face many hurdles on their journey to become professional traders.

Which is the most trusted prop firm? ›

Best Prop Trading Firms 2024 - Reviewed by Experts
  1. Topstep: A Leader in Trading Innovation. ...
  2. The 5%ers: Forex Trading with a Twist. ...
  3. Earn2Trade: Empowering Aspiring Traders. ...
  4. SurgeTrader: A Gateway to Diverse Trading Assets. ...
  5. FTMO: Stringent Yet Rewarding. ...
  6. E8 Funding: Innovative and Flexible.
Feb 2, 2024

Do prop traders need a license? ›

Prop trading firms are less heavily regulated than regular brokerages and broker-dealers. However, if such laws apply, you must still properly register your business and get licensed.

Can you make a living trading for a prop firm? ›

Absolutely, making a living from proprietary (prop) trading firms is entirely possible. These firms provide a platform for traders to access substantial capital, leveraging their strategies to generate profits. It's like having a financial playground with significant resources to trade on behalf of the firm.

What is the profit split for prop firms? ›

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.

Do prop firms give you real money? ›

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.

What is the best risk management for prop firms? ›

How To Manage Risk
  1. Understand the prop firm landscape. ...
  2. Embrace a risk-first approach. ...
  3. Tailor risk management to your trading style. ...
  4. Master the art of position sizing. ...
  5. Learn to wield the double-edged sword that is leverage. ...
  6. Build your psychological resilience. ...
  7. Recognize the importance of a stop-loss strategy. ...
  8. Diversify.
Feb 8, 2024

Do you need a Series 7 to trade at a prop firm? ›

Each Representative shall be required to pass the Series 7 General Securities Representative Qualification Examination unless his or her activities are so limited as to qualify him or her as a Proprietary Trader as specified hereafter.

Are prop firms profitable? ›

Bottom Line. Prop firms are an excellent source of accessing further capital to increase profit potential. Passing a prop firm's evaluation means reaching a profit target while staying within its risk management rules.

What percentage do prop firms take? ›

A prop trading firm looks to recruit talented traders and fund them with the company's capital. The funds that a trader makes, is then split between the trader and the company. The profit share is between 50 – 95%, with the trader taking the lion's share.

How much do prop firms make annually? ›

In conclusion, the income of prop firm traders can vary greatly depending on several factors such as experience, performance, and the size of the firm. On average, a junior prop trader can expect to earn anywhere between $50,000 to $100,000 per year, while a senior trader can make upwards of $500,000 annually.

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