What is a challenge fee?
Quick answer
A challenge fee is the price a trader pays a prop firm to attempt an evaluation. It buys an account of a set size with set rules for one attempt. The fee is usually not refunded if the trader breaches a rule, though some firms refund it with the first payout to traders who pass.
Detailed answer
The challenge fee is the main source of revenue for most prop firms.
What it typically buys
- A trading account with a starting balance, such as $25,000.
- The rules: profit target, loss limits, trading days.
- Access to the terminal and support.
- The chance to earn a funded account.
How firms price it
- By account size: larger accounts cost more.
- By rules: easier or more flexible rules cost more.
- Add-ons: options such as a higher split or no time limit.
Refunds
- Usual: non-refundable once trading starts or after a breach.
- Sometimes: refunded with the first payout as an incentive.
- Unused accounts: many firms refund within a short window.
Example
A $100,000 one-step challenge might be sold for a few hundred dollars. If the trader breaches, the fee is spent; if they pass, they receive a funded account.
Platform cost behind it
On PropExecutor, each challenge account costs the firm one prepaid credit, between about $0.64 and $2.58 depending on plan and pack, whatever the account's size.
PropExecutor team · Updated
Related questions
All 18 questions in Prop firm terms explained · Every category