Prop trading in Europe: the business of hope
The starting point. More and more traders in Austria want to trade with outside capital through online prop firms, to keep their own risk small. Many then find out: the rules are strict, and not everyone manages to meet them.
The reality. Many online prop firms hold no financial license. This is often stated in their own terms on their website. They earn mainly from the fees for the evaluation, which often runs on a simulated account. Strict legal rules apply to managing real outside capital, so check who exactly your contract partner is.
Desk Notes. With many prop models, a small rule violation is enough for the account to be closed, and the evaluation (challenge) then often has to be paid for again. On top of that comes third-party risk: you depend on the company applying its rules and paying out profits. For serious trading that is a big risk, while for practice such a model can be useful.
More notes
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