Funded Account
A funded account is a simulated trading account provided by a proprietary trading firm to a trader who has successfully completed an evaluation challenge, granting the trader access to the firm's capital to trade with in exchange for a defined share of any simulated profits generated.
The capital is the firm's, not the trader's, and the position is contractual — the trader receives a percentage of simulated profits at agreed payout intervals, with the firm retaining the remainder. Most funded accounts inherit the same drawdown and daily loss rules from the evaluation, so a breach after funding ends the account in the same way.
This page covers the mechanic; it is not trading advice.
Prop firm rules vary between firms and change frequently. Always verify specific rules directly with your firm before making any decision.
What 'funded' actually means in practice
The account you earn the right to trade after passing the challenge. The firm provides the capital, you trade it, and any profits are split between you and the firm according to the agreed percentage — typically 70/30 or 80/20 in the trader's favour, though splits range from 50% to 100% depending on the firm and account tier.
The funded account is not the trader's money. It is a simulated balance the firm uses to compute the trader's payout entitlement. The firm may hedge a portion of trader activity in the real market or carry the full simulated exposure as a book risk — the trader does not see this. The trader's contractual claim is the payout percentage of net simulated profit, paid in cash at the payout-cycle schedule defined by the firm.
How a funded account payout is calculated
A trader passes a $100,000 challenge with an 80% profit split and a monthly payout cycle. In the first month after funding, the trader closes the period with $4,000 in net simulated profit.
Payout to the trader = $4,000 × 80% = $3,200. The remaining $800 is retained by the firm. The funded account balance resets to its starting balance of $100,000 for the next cycle.
If the trader instead closes the month at -$1,500, no payout occurs. The funded account continues at $98,500 into the next cycle, and the daily loss limit and trailing drawdown rules continue to apply against the live equity, not the starting balance.
Related terms
Common questions
Is the money in a funded account real?
No. The balance is a simulated amount the firm uses to compute the trader's payout entitlement. The trader does not own the capital and cannot withdraw the simulated balance — only the cash payout calculated as the agreed percentage of simulated net profit at the payout-cycle date.
What happens to a funded account if a payout request is filed during an open trade?
Most firms require all positions to be flat at the payout cutoff. Some firms include floating profit and loss at the cutoff in the payout calculation; others require the trader to close positions before requesting a payout. The firm's payout policy specifies the rule — verify directly with the firm before relying on either pattern.