The Four Prop Firm Business Models

Four business models cover every firm that calls itself a prop firm. The labels are ours. We place a named firm in a model only where the firm itself discloses the feature that defines it.

The evaluation-fee model

You pay a fee, trade a simulated account to a target inside loss limits, and receive a funded account that is, in most cases, also simulated. The firm pays your profit split from its own cash. Its income is the fee, resets and add-ons. 152 of 159 programme rows in our dataset bill a one-time fee as of 13 September 2026; 7 rows bill monthly, all at Topstep's Combine and TradeDay. 12 of 30 firms show a promotional price, averaging 50 percent of list.

The defining feature is that the firm is the counterparty to your simulated trades until it chooses to hedge. Our dataset does not record an execution model for any firm, so we do not say which firms hedge. Finance Magnates describes the trade-off: carrying the risk is cheap while most traders lose and expensive when many win at once, while hedging costs spread, liquidity relationships and compliance ^[7]. Payout obligations are the stress point, because fee inflow is steady and payout outflow is not.

The evaluation-to-live model

This model keeps the fee front end and adds a stated route to live capital. The route is narrow at every firm that discloses it. Topstep reported that 0.71 percent reached Live in 2025 ^[6]. Tradeify reported that 3.0 percent of funded accounts were called up to Live Funded between August 2025 and July 2026, and its Elite tier opens after 3 approved payouts ^[8]. DayTraders.com states that about 1 percent of sim-funded traders move to live, at the firm's discretion. Elite Trader Funding opens its live tier after $25,000 in cumulative simulated payouts. All four figures are self-reported and unaudited.

Live, the firm or its broker carries a real position and earns from your performance rather than from your fee. That is the part of the funnel to read most carefully.

The institutional salary model

Jane Street and Citadel Securities trade the firm's own capital with employees who receive a salary and a bonus. Nobody pays a fee to join. Nothing in this model appears in our dataset and we publish no figures on it. It matters here because the retail industry borrowed its name.

The hybrid or brokerage-integrated model

The fourth model bundles an evaluation business with a regulated broker, an introducing broker or an exchange. 3 firms in our dataset own or run a broker as of 13 September 2026, and 2 more are owned by a broker or an exchange.

FTMO closed its purchase of OANDA from CVC on 1 December 2025 and runs it as a standalone business, at a price its 2025 filings later showed as CZK 8.79 billion, about $422 million, alongside parent OHM's 2025 consolidated revenue of CZK 8.9 billion, up 30 percent ^[1]. Topstep Brokerage, a CFTC-registered introducing broker and NFA member clearing through Plus500, opened its waitlist on 27 January 2026 ^[2], and Topstep added CTA approval in April 2026 and NFA swap-firm registration on 2 May 2026 ^[5]. Tradeify's Slay Markets followed on 19 May 2026 as a CFTC-registered introducing broker with NinjaTrader clearing ^[3], Kraken completed its purchase of Breakout on 4 September 2025 at an undisclosed price ^[4], and DNA Funded is the prop arm of DNA Markets in Australia; see our research on industry-shakeout for the full timeline.

The economics differ in one line: the firm earns spread or commission on live flow as well as fees on evaluations, and the evaluation becomes a client acquisition channel for the broker. An introducing broker also answers to the CFTC and NFA for its brokerage activity, even though neither body has stated a position on the evaluation product itself.

Our view

Our view: the industry is moving from the evaluation-fee model towards the brokerage-integrated model, and dependency rather than regulation is driving the move. A firm that owns its broker no longer waits on a platform vendor's licence decision, and a firm with an NFA registration has a supervisor for at least part of its business. That makes it more legible, not automatically safer. The evaluation-fee model is not a defect. It is a product with one income line and one stress point, and a firm that says so plainly beats one that dresses it up.

What this means for you

Ask which model the firm runs before you ask about the drawdown. The model tells you where your payout comes from and what has to go right for it to arrive.

Read the live-transition figure as the ceiling of the product. 0.71 to 3.0 percent reached live capital at the firms that publish the number. Everything else is a simulated account paid from firm cash.

Treat a broker or exchange parent as a disclosure, not a guarantee. It says nothing about the evaluation rules, which you still read in full.

Data note

Figures marked "our dataset" come from the PropTraderCheck structured dataset as of 13 September 2026: 30 firms with structured programme data (of 37 tracked), 159 programme rows, 48 programmes. Regulatory positions are stated as of the date given and change.