Profit Split
80% sounds great until you do the math on total cost.
What it is
The profit split is the percentage of trading profits a prop firm pays out to the trader. Industry standard ranges from 70% to 90%, with most firms settling around 80%. The firm keeps the rest as their share for providing the capital and platform.
Why the headline number is misleading
An 80% split on a $100,000 account sounds generous. But factor in:
- Challenge fee: $500 upfront to even get the funded account
- Average pass rate: ~10% of traders pass. So statistically, the "real" cost is closer to $5,000 in attempts
- Profit target before first payout: Some firms require 5-10% profit before your first withdrawal
- Payout cycle: Monthly or bi-weekly, money is locked until the cycle ends
A trader who pays $500, spends 2 months passing, then makes $5,000 profit at 80% split gets $4,000. Subtract the challenge fee: $3,500 net over ~3 months of work. The effective split on total effort is much lower than 80%.
Compare properly: Don't compare splits between firms in isolation. Compare the total cost to first payout: challenge fee + time to pass + first profit target + split percentage. A 70% split with a cheap, easy challenge can beat a 90% split with an expensive, difficult one.