How Retail Prop Firms Make Money

Evaluation Fees: The Primary Revenue Source

For many retail prop firms, evaluation fees form a steady and reliable income stream. These upfront charges provide consistent cash flow, regardless of how the market behaves or how traders perform. This model allows firms to capitalize on traders' aspirations while keeping their risk exposure in check.

How Challenge Models Work

Evaluation fees are tied to structured challenges that test traders' skills and discipline. Most firms design these evaluations as multi-phase challenges, requiring traders to meet specific profit targets while adhering to strict. The fee amount usually correlates with the size of the simulated trading account – larger account sizes come with higher fees.