PROPRIETARY TRADING FIRM FORMATION

A proprietary trading firm (Prop Firm) is defined as a bank, brokerage firm or a private company that trades forex, stocks, bonds, options, commodities, or other financial instruments using its own money instead of using customer’s money in its own account and utilizing outside traders called Proprietary Traders (Prop Traders). Since the Prop Firm does not hold any customer accounts but uses their own capital to trade, a Prop Firm can rely on Section 240.15b9-1 of the Securities and Exchange Act of 1934.

A Prop Firm allocates its own capital to various Proprietary Traders (Prop Traders) that specialize in certain asset classes or strategies. Each Prop Trader has certain trading limits and risk exposure set by the Prop Firm. The Prop Firm can restrict its Prop Traders to only trade the Firm’s strategy or allow the Prop Trader to utilize their own strategy approved by the Prop Firm. Prop Traders utilize different trading strategies to maximize returns. 

FOREX PROPRIETARY TRADING 

The overall objective for this type of prop firm is to step up trader funding and provide capital to profitable traders. Once traders have proven they can be profitable by passing an evaluation period, they become a part of the funded trader community, with access to an account funded with up to the buying power specified by the prop firm. 

Our turn-key solution to set up a proprietary trading firm allows you to offer the best available trading technology for accessing financial markets including forex, CFDs, crypto and more.