Glossary
Prop trading, in plain English.
56 terms you'll meet in a firm's rulebook, each explained in a minute with a worked example.
A
B
C
- CFDA contract for difference: a way to trade price moves without owning the asset.
- CommissionA fee charged per trade or per lot traded.
- Consistency ruleA cap on how much of your total profit can come from a single day or trade.
- Copy tradingCopying trades automatically from one account to another.
- Cost per $1KA plan's price divided by its account size in thousands — a fair way to compare prices.
- Coupon codeA code you enter at checkout to lower the price of an evaluation.
D
E
F
- First payoutHow long after funding you can make your first withdrawal.
- Free retryA free retake when you finish an evaluation in profit but miss the target.
- Funded accountThe account you trade after passing, where profits can be withdrawn.
- Funding rateA periodic payment between long and short traders on perpetual futures.
- FuturesStandardised contracts traded on exchanges like the CME.
H
I
K
L
M
- Maximum lossThe total amount your account can fall before it's closed.
- Micro contractsFutures contracts one-tenth the size of the standard ones.
- Minimum trading daysThe fewest days you must place trades before you can pass or request a payout.
- Monthly subscriptionAn evaluation billed every month until you pass, instead of once.
N
O
P
- Pay after you passA plan where you pay a small entry fee to start and the main fee only once you pass.
- PayoutA withdrawal of your share of funded-account profit.
- Payout bufferProfit you must leave in the account above the starting balance before withdrawing.
- Perpetual futuresCrypto futures with no expiry date, kept close to the spot price by funding payments.
- PhaseOne stage of an evaluation. Pass every phase to get funded.
- PipThe standard unit of price movement in forex, usually the fourth decimal place.
- Profit splitThe share of funded-account profit you keep.
- Profit targetHow much profit you must make to pass a phase, as a % of the starting balance.
- Prohibited strategiesTrading methods a firm bans because they exploit the simulated environment.
- Prop firmA company that gives traders a funded account to trade and shares the profit with them.
R
- Refundable feeAn evaluation fee the firm pays back once you're funded and paid out.
- ResetPaying to restart a failed or struggling evaluation at its starting balance.
- Restricted countriesCountries whose residents a firm won't accept.
- Risk per tradeHow much of your account you're willing to lose if a trade hits its stop.
S
- Scaling planA path to a bigger funded balance when you stay profitable.
- Simulated accountAn account that mirrors real prices but doesn't place trades in the real market.
- SlippageThe difference between the price you expected and the price you got.
- SpreadThe gap between the buy and sell price — a cost on every trade.
- Static drawdownA loss limit fixed to the starting balance that never moves.
- Stop lossAn order that closes a trade automatically at a set loss.