Best Proprietary Trading Firms in 2024
All products and services featured are independently selected by WikiJob. When you register or purchase through links on this page, we may earn a commission.
- A List of the Top Prop Trading Firms for September 2024 Are:
- Comparision Table of the Best Prop Trading Firms for September 2024:
- Description of the Best Prop Trading Firms for September 2024
- What Is a Proprietary Trading Firm?
- Types of Proprietary Trading Firms
- Benefits of Proprietary Trading Firms
- Drawbacks of Prop Trading Firms
- How to Choose a Proprietary Trading Firm
- Hedge Fund vs. Prop Trading
empty
empty
empty
empty
empty
- How to Become a Prop Trader
- Frequently Asked Questions
- Final Thoughts
Prop trading, short for proprietary trading, is a type of trading where a financial firm or individual trader trades for its own account rather than on behalf of clients.
In prop trading, the trader uses the firm's capital to take positions in various financial instruments, such as stocks, bonds, commodities, futures, options or currencies, in the hope of generating profits.
Prop trading can be done by various types of firms, such as investment banks, hedge funds or proprietary trading firms.
There are hundreds of prop trading firms across the globe, all with advantages and disadvantages.
A List of the Top Prop Trading Firms for September 2024 Are:
- FTMO
- Lux Trading Firm
- DreamTicks
- Audacity Capital
- IG
- The Funded Trader Program
- SurgeTrader
- The 5%ers
- Fidelcrest
- City Traders Imperium
- 3Red Partners
- Akuna Capital
- Belvedere Trading
- The Trading Pit
- My Forex Funds
- FundedNext
Comparision Table of the Best Prop Trading Firms for September 2024:
Company FTMO | Trading Capital Varies | Account Size Varies | Max. Drawdown 10% | Performance Goals 5-10% monthly | Education Resources Educational Courses | ||
Company Lux Trading Firm | Trading Capital Varies | Account Size Varies | Max. Drawdown Varies | Performance Goals Varies | Education Resources Extensive | ||
Company DreamTicks | Trading Capital Various | Account Size Various | Max. Drawdown Various | Performance Goals Varies | Education Resources Educational Materials | ||
Company Audacity Capital | Trading Capital $25,000 | Account Size $50,000 | Max. Drawdown 5% | Performance Goals Varies | Education Resources Educational Materials | ||
Trading Capital Varies | Account Size Varies | Max. Drawdown Varies | Performance Goals Varies | Education Resources Educational Materials | |||
Company Funded Trader Program | Trading Capital Varies | Account Size Varies | Max. Drawdown Varies | Performance Goals 10% monthly | Education Resources Educational Platform | ||
Trading Capital Varies | Account Size Varies | Max. Drawdown Varies | Performance Goals Varies | Education Resources Varies | |||
Trading Capital $5,000 | Account Size $1,000,000 | Max. Drawdown 5% | Performance Goals 5% monthly | Education Resources Trading Program | |||
Company Fidelcrest | Trading Capital Varies | Account Size Varies | Max. Drawdown Varies | Performance Goals Varies | Education Resources Educational Platform | ||
Company City Traders Imperium | Trading Capital Varies | Account Size Varies | Max. Drawdown Varies | Performance Goals Varies | Education Resources Trading Courses | ||
Company 3Red Partners | Trading Capital Varies | Account Size Varies | Max. Drawdown Varies | Performance Goals Varies | Education Resources Varies | ||
Company Akuna Capital | Trading Capital Varies | Account Size Varies | Max. Drawdown Varies | Performance Goals Varies | Education Resources Varies | ||
Trading Capital Varies | Account Size Varies | Max. Drawdown Varies | Performance Goals Varies | Education Resources Varies | |||
Trading Capital Varies | Account Size Varies | Max. Drawdown Varies | Performance Goals Varies | Education Resources Varies | |||
Company My Forex Funds | Trading Capital Varies | Account Size Varies | Max. Drawdown Varies | Performance Goals Varies | Education Resources Varies | ||
Company FundedNext | Trading Capital Varies | Account Size Varies | Max. Drawdown Varies | Performance Goals Varies | Education Resources Varies |
1. FTMO
Pros
- Access to MetaTrader platforms
- There is a free trial
- Refundable registration fee
- 90% profit split
Cons
- Overnight and weekend trading only available to those on the swing trader challenge
- High costs compared to others
- The verification process is more challenging than others
Best for: Security
Maximum capital allowance: $400,000
Leverage: 1:100
Fees: Starting at £155
FTMO was founded in Prague in 2014 and has a two-step evaluation process called the FTMO Challenge and Verification course.
The company also provides performance coaches and excellent customer service.
It offers trading in forex, stocks and bonds. Its scaling plan gives a 25% balance limit increase every four months.
2. Lux Trading Firm
Pros
- Access to several trading platforms
- Live trading rooms
- Daily market updates and information streams
- Free trial
- The evaluation process only has one stage
- No time limit on targets
- Weekend holding permitted
Cons
- Profit split of up to 65% – other firms offer much higher
- Maximum loss limit
Best for: Social trading
Leverage: 1:100
Fees: Between £299 and £499, depending on the amount you start with and refunded after stage 1.
Lux Trading is a London-based proprietary trading firm founded in 2021. Like many of the new prop trading firms, there is not enough data to confirm the trustworthiness of the company.
Traders work through stages, from one to eight, progressing when they reach a 10% target. Lux Trading offers trading in commodities, crypto, forex, indices and stocks.
There is a large element of social trading, with chat rooms and trading rooms open for idea-sharing and feedback.
3. Audacity Capital
Pros
- Superb support and trading conditions
- Favourable scaling programme
- No evaluation process
Cons
- 50/50 profit share
- Only forex trading
- Monthly fee
- Low funding compared to other firms
Best for: Funded programmes
Leverage: 1:5
Fees: £199 joining fee and £99 monthly fee
Audacity Capital was founded in 2012 in London and has traders all over the world.
It doesn’t have a typical evaluation process. Instead, traders apply for a role and are invited for an interview.
Successful traders choose between the Hidden Talents programme or the Funded Trader programme. The first is designed for traders with a natural ability but no experience, and the latter for experienced traders with a three-to-six-month track record.
4. DreamTicks
Pros
- Access to the world's leading trading platform MT4
- Trade with real capital
- No time limit on targets
- Same day pay-outs
- Reset the challenge at any time
- Refundable registration fee
- Up to 90% profit split
- Scale account to $1,000,000
Cons
- Max account is $200,000
% of Profits Retained: 80-90%
Leverage: Up to 1:60
Customer Service: Excellent
DreamTicks is a Maltese-based company founded in 2023. Its founders have long and proven track records from diverse backgrounds, including profitable day trading, executive roles in the regulated online gambling industry, and leadership in a global Tier One FX broker.
Offering personal onboarding, English and Spanish customer support, and limitless challenge resets, DreamTicks focuses on customer satisfaction and long-term engagement.
DreamTicks offers great spreads, and Traders can experience real market conditions with real money, proving the authenticity and financial robustness of their offerings.
5. IG
Pros
- Highly regulated
- MetaTrader 4 (MT4)
- Over 10,000 instruments
- Available in the UK and US
- 24/7 customer support
Cons
- High fees
- No deposit compensation scheme for US accounts
- No copy trading
- Inactivity fees
IG invented spread betting in 1974 and today is the world’s leading online trading provider with more traders trusting them with their money than anyone else
IG is authorised and regulated by the FCA and provides traders access to over 18,000 markets. IG offers more 24-hour indices than any other provider, and extended hours on over 70 key US stocks
For those who prefer to own the underlying asset, IG offers access to over 13,000 global shares and ETFs, or a wealth portfolio managed by one of their experts.
Benefits:
- Advanced platform and charting – L2 dealer, ProRealTime and MT4
- Demo account
- Extended trading hours
- Extensive range of products
- Daily expert analysis & educational resources
- Round-the-clock customer service
- Negative balance protection for retail clients
Based on revenue (published financial statements, October 2022). 24/7 excludes the hours from 10 pm Friday to 8 am Saturday (UK time), and 20 minutes just before the weekday market opens on Sunday night.
6. The Funded Trader Program
Pros
- Large selection of trading options
- Trading during news and weekend allowed
- Refundable registration fee
- 80% profit split for standard accounts and 90% with scaling
- Relaxed trading rules
- Designed to suit all trading platforms, including MetaTrader
Cons
- Free trials are not currently available
- Customer service can take a while to respond
- New company, so trustworthiness cannot be confirmed
Best for: Relaxed trading rules
Maximum capital allowance: $1.5m
Leverage: Up to 200:1
Fees: $315 for $50,000 account size
The Funded Trader Program is an online prop trading firm founded in Texas in 2021.
As it is so new, there is no historical data to confirm if the firm is reliable and trustworthy.
It offers three different accounts – Standard, Rapid and Royal Challenge – which traders progress through during their trading evolution.
Traders can take home profit splits of up to 90% and can trade in forex, commodities, crypto and indices.
The trading rules are very simple to follow and traders are allowed to trade on the weekends when they reach the Royal Challenge.
Evaluation periods are 35 and 60 days, and traders are rewarded for consistency.
Visit The Funded Trader Program
7. SurgeTrader
Pros
- Traders keep 75% of profit
- One-time audition
- Free trial available
- Easy-to-use tools and interface
- No minimal trading days
- News and overnight trading allowed
- Quick processing of profits
- No recurring fees for successful active accounts
Cons
- Non-refundable registration fee
- High expectations in the audition
Best for: High trade amounts with few restrictions
Leverage: 10:1 for forex, metals and indices, 5:1 for stocks and 2:1 for crypto
Fees: Between $250 and $6,500 depending on the package you choose
SurgeTrader was established in Florida in 202, meaning it doesn’t have enough of a track record to state whether it is reliable or not.
There is a one-time audition process that is reported to have strict standards.
SurgeTrader also offers lots of trading options, including oils, metals, crypto, forex, stock and indices.
As a trader, you start on the intermediate account before moving to seasoned, advanced and, finally, expert.
8. The 5%ers
Pros
- Extensive support and educational resources
- Funding up to $4m
- Considered the best prop trading firm
- Overnight and weekend trading allowed
Cons
- No disadvantages have been noted
Best for: Forex traders
Leverage: 1:30 or 1:6, depending on the model
Fees: Instant: €235; Freestyle: €285; $100k Bootcamp accounts: €85
The 5%ers was founded in 2014 and is based in Israel. Its goal is to facilitate the growth and success of forex traders.
There are three packages: Instant, Bootcamp and Freestyle. The Freestyle package allows for 100% profit, Instant 50% and Bootcamp 80%.
Once you have completed one of these challenges, you have access to unlimited funding.
9. Fidelcrest
Pros
- Funding up to $1m
- Profit splits of up to 90%
- Multiple bonuses and incentives
- One-off entry fee
- Account analysis
- News trading allowed
Cons
- Minimum 10 trading days
- Low-profit share before verification
- Long-term trading strategies are discouraged
Best for: Crypto
Leverage: 1:100
Fees: Between €649 and €1,599, depending on the account and funding
Fidelcrest was founded in Cyprus in 2018 and has a two-step evaluation process lasting 60 days.
If you are successful, there are two trading programmes: Micro Trader and Pro Trader.
10. City Traders Imperium
Pros
- Excellent training and trading tools
- Potential 100% profit split, though the standard is 70%
- News and weekend trading allowed
- Overnight holds allowed
Cons
- Long evaluation period
- Not ideal for scalping
- Non-refundable registration fee
Best for: Gold and indices
Leverage: 1:10
Fees: From £109 to £640 for evaluation accounts and £109 to £3,099 for funded and forex funded accounts.
Based in London, City Traders Imperium was founded in 2014.
Traders can trade forex, gold, indices and shares.
There is a one-year evaluation process where successful traders can earn a 400% reward. However, that process can be skipped if you have the record to prove your trading ability.
11. 3Red Partners
Pros
- Excellent software, tools and resources
- International trading community
Cons
- Lack of transparency
Best for: Advanced tools and resources
Very little information regarding profits and leverage is available for 3Red Partners.
What is known is that this Chicago-based company uses high-frequency trading platforms and specially created algorithms to read and interpret data, allowing traders to make well-informed trades.
12. Akuna Capital
Pros
- Focus on technologies and algorithms to improve trades
- Accepts interns, intermediate and expert traders
- Interns don’t need any qualifications, just talent
- Educational resources
- Career development opportunities
Cons
- Lack of transparency
Similar to 3Red Partners, there is very little information about the prop trading firm.
It is another Chicago-based company, founded in 2011, and has a revenue of $100m to $500m.
13. Belvedere Trading
Pros
- Excellent learning programmes
- Mentoring for new traders
- Team-focused
- Develops innovative software and algorithms
Cons
- No transparency when it comes to the trader's benefit and employment package
Best for: Forex trading
As is the trend with most Chicago-based proprietary trading firms,there are very few details on Belvedere Trading’s leverage, profit split and trading programmes.
It was founded in 2002 and has a revenue of $16.58m, so it can be considered trustworthy, and it is obviously doing something right.
Its strength is the market-making trades, and it trades in indices, interest rates, energies, grains, softs, metals, equity index and commodities.
14. The Trading Pit
Pros
- Up to $100m buying power
- Up to 70% profit share
- Excellent support and educational resources
Cons
- No overnight holds
- Unclear leverage
- Minimum seven-day trade
- Set a daily loss limit
Best for: Clear direction and scaling plan
The Trading Pit was founded in Cyprus and offers its best traders the chance to earn an official certification and become a fund manager.
It has an evaluation process where you need to prove your trading skills. Once you pass, you go on to become a Funded and Scaling Trader before finishing as a Trading Pit Expert.
15. My Forex Funds
Pros
- Large selection of trading options
- Trading during news and weekend allowed
- Refundable registration fee
- Up to 85% profit split
- Uses MetaTrader 4
- Excellent support tools
- Cover for beginner, intermediate and advanced traders
- Relaxed trading rules
Cons
- Only trades forex, crypto and metal
- Customer service can take a while to respond
Best for: Skipping the evaluation process
Leverage: Up to 200:1
Fees: Registration fee between $499 to $2,450
MyForexFunds was founded in 2020 in Canada and has a two-step evaluation process that you can skip if you have enough experience.
It offers instant funding and provides customisable funding programmes.
16. FundedNext
Pros
- Maximum balance of $4m
- Up to 90% profit split
- Refundable registration fee
- No restriction on trading style
- Weekend and overnight holding allowed
- An account manager for every trade
Cons
- Minimum 10 days of trading
- Still new so expect flaws
- Consistency rules for express accounts
Best for: Relaxed trading rules
Leverage: 10:100
FundedNext is a new proprietary trading firm that operates out of the UAE, Bangladesh, UK and the US. Its partner broker firm is regulated by the Australian Securities and Investments Commission (ASIC), so the company does have a level of trust and reliability.
It offers low commissions and spreads and works with forex, indices and commodities.
Once you complete the two-step evaluation, the goal is simple: pick your funding model, stay profitable and get more funding.
What Is a Proprietary Trading Firm?
Also known as prop trading, a proprietary trading firm is a financial company or commercial bank that recruits professional traders to make direct market gains.
A prop trading firm does not make trades on behalf of a client.
The capital for these trades is generated from the company or bank and used for trading in numerous assets including:
- Stocks
- Bonds
- Forex
- Cryptocurrencies
- Indices
- Futures
- Commodities
It is also common for proprietary trading companies to specialise.
Traders who are hired by these companies are trained to earn profits. All profits made by the trader are split between the trader and the company.
To facilitate a trader’s success, the firm offers support by way of training, retraining, coaching, providing professional trading tools and more.
There are often stringent rules traders must follow, designed to encourage better profit levels and reduce losses.
When hiring, the best proprietary trading firms will start the recruitment process with a staged evaluation. This includes using a test account. These accounts prove whether or not traders have the skills required for the role.
Some trading companies will offer commission or profit splits during the evaluation, but others don’t.
Types of Proprietary Trading Firms
There are several types of proprietary trading firms, each with their own unique characteristics and strategies.
Here are some more details about the different types of prop trading firms:
-
High-Frequency Trading (HFT) Firms – These firms use complex algorithms and high-speed technology to execute trades in milliseconds or less. The goal of HFT firms is to take advantage of small price discrepancies in the market that may only exist for a fraction of a second.
-
Quantitative Trading Firms – These firms use mathematical models and statistical analysis to make trading decisions. They typically have a team of mathematicians, physicists, and computer scientists who develop these models and algorithms.
-
Market Making Firms – These firms provide liquidity to the market by buying and selling securities and derivatives. They typically make money by earning the spread between the bid and ask prices of the securities they trade.
-
Discretionary Trading Firms – These firms rely on the expertise of experienced traders to make trading decisions based on their analysis of market conditions. They may use a combination of technical and fundamental analysis to make their trades.
-
Event-Driven Trading Firms – These firms specialize in trading securities based on events such as earnings reports, mergers and acquisitions, and economic indicators. They analyze these events and try to predict how they will affect the market.
-
Arbitrage Trading Firms – These firms make profits by taking advantage of price discrepancies between different markets or securities. For example, they may buy a security on one exchange where it is undervalued and simultaneously sell it on another exchange where it is overvalued.
-
Multi-Strategy Trading Firms – These firms use a variety of trading strategies across multiple asset classes to diversify risk and maximize returns. They may use a combination of the strategies mentioned above, as well as other strategies such as trend following and mean reversion.
Benefits of Proprietary Trading Firms
Choosing the best proprietary trading firm for you can take time, but there are lots of advantages, such as:
- Most firms offer funded trading, meaning you don’t need a large amount of capital investment. Often only a registration fee is needed.
- Prop trading companies also often offer lots of training and retraining, with some encouraging social trading.
- You have access to professional tools, information and top-level data software at either a reduced rate or no cost.
- Prop Traders have access to the exchange
- You don’t have to worry about conflicts of interest between companies and traders.
Drawbacks of Prop Trading Firms
Here are some potential drawbacks of prop trading firms:
- Prop trading firms often take on higher levels of risk than other types of financial firms, which can lead to significant losses in volatile market conditions.
- The profitability of prop trading firms is highly dependent on market conditions, which can change rapidly and unpredictably.
- Prop trading firms may have limited diversification, as they may focus on a narrow range of financial instruments or trading strategies.
- Prop trading firms may be less transparent than other types of financial firms, as they may not have to report their trades to regulatory authorities.
- Prop trading is a highly competitive industry, and traders may face intense pressure to generate profits.
- Prop trading firms require significant amounts of capital to operate, which can make it difficult for new firms or traders to enter the industry.
- Prop trading firms may have high overhead costs, such as technology infrastructure and compensation for traders.
- Prop traders may have limited exit opportunities, as the skills and expertise required for prop trading may not be easily transferable to other industries.
How to Choose a Proprietary Trading Firm
Before selecting and applying to a prop trading firm, you need to assess the pros and cons of each and decide which is the best one for you.
When evaluating the firms, consider:
-
Reputation – Check that the firm is profitable and reliable within its niche. This may take some lengthy research, and you may want to speak to other traders. TrustPilot is a great place to get started, as is Reddit and Quora. Those companies that are the most trustworthy are more transparent with company happenings.
-
Available Assets – Check which assets can be traded with each platform/company. If you want to specialise in just forex, then opt for a firm that has the resources for that. If you want to trade in all assets, you will need to find one that has a wide variety.
-
Fees – There are going to be fee structures. Sometimes this is just a one-off payment for the evaluation procedure. Others have monthly fees and fees for different types of trading.
-
Trading Platform – Ensure that the firm has a good trading platform that meets all the requirements. Ideally, you want to be able to test the platform first to ensure you are comfortable with the interface.
-
Trading Style – Different firms have different styles and approaches. Some rely on technical analysis, others on fundamentals. There are also some prop trading firms that encourage short-term strategies and others that allow for overnight/weekend holds. Decide what trading strategy you want to adopt and find the firms that accommodate it.
-
Customer Support – Customer service is important for working with any firm. Some have better rates of responding, a better reputation or more communication methods.
Hedge Fund vs. Prop Trading
Hedge funds and prop trading are both types of financial firms that engage in trading activities, but there are some key differences between them:
Objective
Hedge funds aim to generate returns for their investors while minimizing risk.
They typically use a variety of strategies, such as long/short equity, global macro, event-driven or relative value, to identify market inefficiencies and make profitable trades.
Hedge funds may also use leverage and derivatives to amplify their returns or reduce their risk exposure.
In contrast, prop trading firms aim to generate profits for their own account.
They typically use a combination of fundamental analysis, technical analysis and other quantitative methods to identify market opportunities and make trades that are expected to be profitable.
Capital
Hedge funds raise capital from external investors, such as high-net-worth individuals, institutional investors or pension funds, and use that capital to invest in various financial instruments.
The amount of capital invested in a hedge fund can vary widely, from a few million dollars to several billion dollars.
In contrast, prop trading firms use their own capital to trade financial instruments.
The amount of capital available to a prop trading firm depends on its size, profitability and risk management policies.
Risk
Hedge funds typically seek to manage risk by diversifying their portfolios and using hedging strategies to reduce exposure to market fluctuations.
They may also use stop-loss orders and other risk management techniques to limit losses.
Hedge funds may also be subject to restrictions on leverage and risk-taking.
Prop trading firms, on the other hand, often take on higher levels of risk, using leverage and other financial instruments to amplify their returns.
Prop trading firms may also be more focused on short-term trading opportunities, which can increase their risk exposure.
Regulation
Hedge funds are subject to various regulatory requirements, such as registration with the Securities and Exchange Commission (SEC) and compliance with securities laws.
Hedge funds may also be subject to regulatory oversight by other agencies, such as the Commodity Futures Trading Commission (CFTC).
Prop trading firms are also subject to regulation, but their activities may be subject to less oversight than those of hedge funds.
Prop trading firms may be subject to regulations related to market manipulation, insider trading and other types of fraud.
Structure
Hedge funds typically have a management fee and a performance fee, and their investors may have restrictions on withdrawing their funds.
The management fee is typically a percentage of the assets under management, while the performance fee is typically a percentage of the profits generated by the hedge fund.
Prop trading firms may have a different compensation structure, such as profit-sharing agreements or bonuses based on performance.
Prop trading firms may also be more focused on short-term profits, which can lead to a different compensation structure.
Overall, hedge funds and prop trading firms have different objectives, sources of capital, risk profiles, regulatory requirements and compensation structures.
While both involve trading financial instruments, they are distinct types of financial firms.
How to Become a Prop Trader
Inspired to become a prop trader after reading this article? Here are our tips to help you get started.
Remember, becoming a prop trader requires dedication, hard work and a willingness to take risks.
It may take time to build up the necessary skills and experience, but with persistence and determination, you can achieve your goals.
Step 1. Gain a Solid Understanding of Financial Markets and Trading
Start by learning about the basics of finance and trading, including stocks, bonds, commodities, futures, options and forex.
You can do this by reading books, taking courses, attending seminars or even pursuing a degree in finance, economics or a related field.
Step 2. Build a Track Record of Trading Success
Start trading on your own, even with a small amount of capital.
This will help you gain experience and develop your trading skills.
You may also want to consider joining a trading competition to showcase your skills and gain recognition.
Step 3. Get Licensed
Most prop trading firms require you to have a securities license, such as the Series 7 or Series 56.
These licenses demonstrate that you have a solid understanding of financial regulations and ethical standards.
You must pass a qualifying exam to obtain your license and then pay a fee to obtain the licence itself.
The exam will need to be with the appropriate regulatory organization. For example, in the US, the Financial Industry Regulatory Authority (FINRA) administers most securities licensing exams.
Step 4. Network
Reach out to prop trading firms and other trading professionals to learn more about the industry and potential job openings.
Attend industry events, conferences and meetups to expand your network and gain exposure to new opportunities.
Step 5. Get a Job as a Prop Trader
Once you have identified a prop trading firm that interests you, submit an application and prepare for the interview process.
Be prepared to discuss your trading experience, track record, and why you are interested in prop trading.
There is no minimum or maximum a prop firm trader can make. Depending on your skill level, you can expect to make around £200,000 a year, increasing to over £1m as you become a more senior trader.
If you are a competent trader, then, yes, prop firms are worth it. You find one that suits you, register, pass the evaluation, pay your fee and start trading with the funds now available to you.
The more successful and consistent you are, the more funds you will have access to.
While it isn’t always essential, a degree in a related field such as business, economics or finance will help you with your trading decision.
However, as this information is something you can learn on the job, your skills and attributes have more value.
As with any type of trading, there is always a risk. Markets change and events happen that affect all stocks and shares.
Most proprietary trading firms do ask for a joining fee or fee of some sort upfront.
This figure varies greatly between the firms and is dependent on the type of programme or account you want to open.
The best way to get a job in a prop trading firm is to first get a degree and/or master’s in a related field such as finance, economics, computer science, statistics or business.
While studying, you should look to apply your knowledge through work experience and internships. Assuming you have a good track record, you will be able to apply for a position in a prop trading firm.
The main difference between a hedge fund and a prop trading firm is that hedge funds use their clients’ money to make investments. A prop trading firm uses its own money.
Jane Street Capital is believed to be one of the biggest proprietary trading firms based on profits. In 2020, Jane Street reported it traded more than $17tn worth of securities.
The tax process for prop traders can get very complicated, as there are a lot of technicalities and grey areas in legislation.
It is advised that you speak with an accountant, financial advisor or lawyer to ensure you don’t make any mistakes. The possible taxes you will have to pay are National Insurance, income tax and capital gains tax.
Yes, many prop firms trade stocks. These include SurgeTrader, Fidelcrest, The Trading Pit and LuxTrading Firm.
Final Thoughts
Proprietary trading, like all trading, comes with a lot of risk and caution should be taken when making trades.
A large number of the best prop trading firms have stop-loss and minimum profit loss rules in place to minimise damage.
That being said, if you have the knowledge and talent for trading, then this can be a lucrative career option.
Before committing to one firm, remember that there are hundreds of firms across the globe and some are better than others. Do your research, check the trustworthiness of the firm and confirm that it supports your trading style.
WikiJob does not provide tax, investment, or financial services and advice. The information is being presented without consideration of the investment objectives, risk tolerance, or financial circumstances of any specific investor and might not be suitable for all investors. Past performance is not indicative of future results. Investing involves risk including the possible loss of principal.