How Much Do Prop Traders Make?

Last Updated: 14/03/2025

How Much Do Prop Traders Make?

Proprietary trading is an attractive career path for traders looking to leverage firm capital instead of their own. However, there is a lot of misinformation about how much prop traders actually earn. Many sources exaggerate potential earnings without discussing the challenges, risk management, and payout structures involved.

This article breaks down how proprietary traders earn, what factors influence their income, realistic expectations versus misleading claims, and examples of top prop firms and their payout structures.

How Do Prop Traders Earn Money?

Proprietary traders make money through a combination of profit splits, scaling opportunities, and performance-based bonuses. Unlike retail traders who keep all of their profits but risk their own capital, prop traders use the firm’s money and share profits based on a predetermined structure.

1. Profit Splits

Most prop firms operate on a profit-sharing model, where traders keep a percentage of their profits. The percentage varies depending on the firm, the trader’s experience, and their performance level.

Beginner traders typically receive 70-80% of their profits.
Experienced traders with a consistent track record can earn 80-90%.
Some firms offer scaling plans where traders who reach profit milestones qualify for a higher percentage of profits.

2. Scaling Opportunities

Many prop firms allow traders to scale their capital allocation as they prove consistent profitability. This means that even with the same profit split, traders can earn more as their position sizes and capital increase.

A trader starting with a $50,000 account might only keep $3,500–$5,000 per month at a 70% split.
A trader managing a $500,000 account could earn $35,000–$50,000 per month under the same split.
Firms may have scaling thresholds where traders receive more capital after hitting specific profit targets.

3. Performance Bonuses

Some prop firms offer bonuses for high-performing traders as an incentive to remain with the firm. These bonuses can include:

Extra payout percentages for reaching high profit thresholds.
Increased buying power for traders who maintain a high win rate and risk management discipline.
Performance-based bonuses in cash or other incentives for consistency.

What Affects a Prop Trader’s Earnings?

While proprietary trading offers strong income potential, several factors influence how much a trader can make.

1. Market Conditions

Volatile markets offer more trading opportunities but require greater discipline.
Range-bound markets may limit profit potential but provide stability.
News events and economic releases can create high-risk, high-reward scenarios.

2. Skill Level and Trading Strategy

Scalpers make frequent small trades and rely on high volume to generate profits.
Swing traders hold positions for several days and target larger moves.
Trend traders focus on long-term trends, often with fewer but more substantial trades.

3. Firm Type and Trading Model

Firms with traditional profit splits require traders to maintain a strong win rate and risk management.
Evaluation-based firms like FTMO and TopStep require traders to pass challenges before receiving capital.
Structured prop firms such as Maverick Trading or SMB Capital provide long-term career paths with scaling options.

4. Trading Discipline and Risk Management

Traders who consistently stick to risk limits and avoid overleveraging are more likely to maintain long-term profitability.
Poor risk management can lead to loss of funding or forced trading restrictions.

Realistic Income Expectations vs. Misleading Claims

Some websites and social media influencers make exaggerated claims about how much prop traders earn. While top traders can generate significant profits, it is crucial to set realistic expectations.

Realistic Expectations

New traders typically earn $2,000–$5,000 per month in the beginning.
Experienced traders managing large accounts can make $10,000–$50,000 per month.
Very successful traders in top-tier prop firms can earn six-figure or seven-figure salaries per year, but this takes years of consistency and experience.

Misleading Claims

“You can make $100,000 per month immediately.” This is unrealistic for most traders and only applies to a small percentage of elite performers.
“Prop trading is easy money.” Prop trading requires discipline, skill, and adherence to strict risk management rules.
“Anyone can be a millionaire through prop trading.” While some traders achieve great success, it requires dedication, strategy, and years of experience.

Examples of Top Prop Firms and Their Payout Structures

1. Maverick Trading

Specializes in forex and options trading.
Offers structured risk management and scaling opportunities.
Provides traders with educational resources and mentorship.
Profit splits range from 70-90% depending on experience and performance.

2. T3 Trading Group

Equity trading firm with remote and in-office opportunities.
Requires a licensing process for equity traders.
Provides direct market access with professional tools.
Profit split varies but typically starts at 70% and increases over time.

3. SMB Capital

Focuses on equities and options trading.
Offers a structured training program for developing traders.
Uses a performance-based scaling model.
Profit-sharing percentages depend on a trader’s skill level and longevity with the firm.

4. FTMO

One of the largest evaluation-based funding programs.
Traders must pass a challenge before receiving funding.
Provides up to $400,000 in trading capital.
Profit splits typically range from 80-90%.

5. TopStep

Specializes in futures trading.
Requires traders to complete a challenge before receiving funding.
Offers scaling opportunities as traders prove profitability.
Profit split starts at 80% and can increase over time.

Key Takeaways

✅ Most prop traders earn money through profit splits, scaling, and bonuses.
✅ Earnings depend on market conditions, strategy, skill level, and firm type.

✅ Many new traders struggle at first, and only consistently profitable traders earn substantial amounts over time.
✅ Beware of misleading claims about quick riches in prop trading.
✅ Top prop firms offer structured payout models and growth opportunities.

Final Considerations

Proprietary trading can be highly profitable, but success depends on skill, discipline, and proper risk management. While some traders achieve six-figure earnings, most start with modest profits and grow their income over time. Understanding how profit splits work, choosing the right firm, and managing risk effectively are key to long-term success.

If you’re considering prop trading as a career, research firms carefully, set realistic expectations, and focus on developing strong trading skills. With the right approach, prop trading can provide a sustainable and rewarding career path.

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