How do prop firms make money?

Описание: Prop firms are taking the trading industry by storm! But how exactly do they make money?

Although the exact business model may vary from company to company, prop firms usually have a single source of income - the fees traders pay to join challenges and get qualified for funded accounts. Since only a small percentage of traders pass these challenges, prop firms earn repeated revenue from unsuccessful attempts. Traders that pass challenges get a funded account, from which they can request payouts for any generated profits.

Given than most funded traders are provided virtual accounts to trade with, spreads, commissions, and profit splits, are not usually ways prop firms generate revenue - although elements like spreads and commissions are taken into account when calculating trading profits for funded traders.

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