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Investment
Prop Trading
Proprietary trading where a firm trades its own money instead of clients' money to make profit for itself.
Prop trading firms look for talented traders and give them capital, training, and risk limits. Popular in forex, futures, and stocks. Traders love it because they can trade big size without using their own money. After 2021 regulations, many prop firms now use "funded account" models where traders pass challenges to get funded.
It's like a restaurant chef cooking amazing meals using the restaurant's ingredients and keeping all the profit instead of cooking for customers.
Real world: A prop trading firm gives a trader £100,000 of the firm's money. The trader keeps 60-80% of any profits made and the firm takes the rest. If the trader loses money, the firm absorbs the loss (but may fire the trader).
💡 Prop trading lets skilled traders play with big money without risking their own savings.