What is a prop firm?

The term originally meant a company that traded its own money with its own staff. Since the late 2010s it has mostly come to mean an online business built around evaluations:

• A trader pays a fee for an evaluation account with a set balance, such as $10,000 or $100,000.
• The trader must hit a profit target without breaking rules such as a daily loss limit and a maximum loss limit.
• A trader who passes gets a funded account and is paid a share of the profit it makes, typically called a profit split.

The firm's revenue comes from evaluation fees, and its main cost is paying traders who pass. That makes rule design, risk monitoring and reliable technology the core of the business. Most firms do not build the trading technology themselves; they license a platform that runs the accounts, enforces the rules in real time and gives traders a terminal to trade on, which is the part PropExecutor provides.