Funded Account

A funded account is the trading account a prop firm provides after a trader passes evaluation (or after they pay the upfront fee for an instant-funding account). The trader trades the account, the firm books the P&L, and the trader receives a profit-split payout on net profits.

A critical distinction most marketing pages bury: the vast majority of "funded" accounts at retail prop firms are simulated, not live. The firm watches the trader's hypothetical P&L on a demo environment and pays out winning traders from the pool of evaluation fees collected from all participants. This is not necessarily problematic — it is a workable economic model — but it changes the legal and operational character of the account materially. The trader is not, in the traditional sense, trading firm capital in live markets.

A small number of firms (typically firm-capital and bank/institutional desks) do trade live capital with funded traders. These accounts come with different risk parameters, slower onboarding, and usually different compensation structures (base + bonus rather than pure profit split).

When evaluating a "funded account" offer, the questions that matter: live or simulated, payout schedule and threshold, profit-split percentage and escalation, what happens at account breach, and whether the account can be scaled into a larger one over time.