You have undoubtedly heard discussions concerning futures prop businesses if you have recently participated in trading communities, whether on YouTube, Discord, or the standard X for all things finance. Like other traders, you've undoubtedly asked yourself, "Alright, what exactly are these firms, and how do they actually work?"
You are by no means alone, so don't worry. Over the past few years, futures prop firms have been increasingly popular, particularly as more traders seek ways to trade larger accounts without jeopardizing their personal assets. Despite all the hype, there is still a great deal of uncertainty about what these companies actually provide, how the review process operates, how rewards take place, and what you are truly joining up for. Let's talk about it.
What Exactly Is a Futures Prop Firm?
A futures proprietary trading firm, or a "futures prop firm" for short, is a company that provides traders with access to trading capital so they can trade futures markets without using their own money.
Basically, you bring your skills and the firm brings the cash.
Instead of requiring traders to deposit thousands- or tens of thousands- of dollars to open a futures account, prop firms let you trade with their money. The catch? You usually have to pass an evaluation first, and you have to follow the firm's rules while trading live capital.
With that, you keep a share of the profits you make, sometimes as high as 80%, 90%, or even 100% with certain firms.
It's a win-win setup:
- You get to trade bigger sizes than you could afford alone.
- The company earns a portion of everything you make.
Pretty simple in theory, but as you start digging into the details, there's a lot going on behind the scenes.
Why Futures Instead of Forex or Stocks?
You might have noticed that there are prop firms for different markets: forex, crypto, options, and now futures. Futures prop firms stand out for a few reasons:
Regulation is stricter
Unlike forex futures trading, often operating in a gray regulatory area, futures prop firms fall under the rulebook of the CFTC and NFA in the U.S. That alone gives traders way more confidence.
Implementation Is Cleaner
Futures markets run on centralized exchanges such as the CME, so you aren't dealing with shady brokers, fake prices, or questionable fills. What you see is what you get.
Leverage Is Built-In
You don't need insane leverage, because futures contracts are already leveraged by design.
The Market Runs Almost 24/5
Perfect for day traders, scalpers, and swing traders looking for consistent movement.
So yeah, that's probably why the best prop firms for futures have been booming lately.
The Prop Firm Evaluation Process: How You Actually Get Funded
Alright, let's talk about everyone's favorite part: the evaluation. Love it or hate it, this is how you get through the gate into a funded futures account.
Most of the futures prop firms follow a similar structure. Here is what it usually looks like:
Step 1: Choose an Account Size
Firms typically provide a variety of simulated account sizes, such as:
- $25,000
- $50,000
- $100,000
- $150,000
- $250,000
Larger accounts allow more contracts, but they also come with stricter trailing drawdown rules.
You pay a monthly fee to participate in the evaluation, though some firms offer one-time fees.
Step 2: Trade to Hit the Profit Target
Every evaluation has a profit objective. For instance:
- $2,000 on a $50k account
- $3,000–$4,000 on a $100k account
You have complete freedom here-you can trade whatever futures contracts the firm allows, ES, NQ, CL, GC, etc.-as long as you reach the target without breaking the rules.
Step 3: Obey the Rules
This is where many traders mess up. Futures prop firms generally have rules such as:
- Daily loss limit
- Overall trailing drawdown
- Maximum position size
- Compulsory stop losses for some firms
- No trading around major news events for some assessments
The idea is to prove you can trade responsibly, not just hit one lucky home run.
Step 4: Get Funded
Once you hit the profit target and follow the rules, you graduate to a funded account, or as some firms call it, a “paid account.”
Now you're trading with real capital, and this is when you can start receiving payouts.
How the Trailing Drawdown Actually Works
If you've been around futures prop communities for more than 5 minutes, you've probably heard someone complaining about "the trailing drawdown." And yeah-it deserves its reputation.
Here's the quick breakdown:
- The trailing drawdown is a moving limit that follows your account growth upward.
- Let's say your drawdown limit is $2,000 on a $50,000 account. When your account has a good day and reaches $51,000, your trailing drawdown will move up with it, usually to the highest balance minus $2,000.
That means you can't dip below that new line-or your account is breached.
Some firms, however, switch to a static drawdown as soon as you reach a certain amount of profit. Those are usually more trader-friendly.
What Happens After You're Funded?
This is where things get fun—and where a lot of new traders don't really understand what they're stepping into.
When you're funded, you're not actually trading the firm's "real" money directly on the exchange. This is a surprise for some traders, but here's what usually happens:
You trade on a funded simulation environment.
Your performance is tracked as if you were trading live, but the firm may only route orders to the real market once you're consistently profitable and generating payouts.
This allows the firm to manage risk, while still paying you based on your simulated live results.
Not every company does it this way, but many do—and it's an efficient model on both sides.
Payouts: How You Actually Get Paid
Each firm offering futures props has its own payout structure, but most offer something like this:
- Profit splits of 80/20, 90/10, or 100% to the trader
- Weekly, biweekly, or monthly payouts
- Minimum cash withdrawal limits, often $500 or $1,000
- Withdrawal limits early in the account, such as max $2,000 per payout until you scale
Some of the more trader-friendly firms allow you to keep your first few thousand dollars at 100%, which is a big boost for new funded traders.
Once you start scaling, your contract size limits may also increase, enabling you to trade bigger size for larger payouts.