Reasoning behind funded trading programs
Proprietary trading firms fund skilled traders through profit-sharing models. Instead of risking their own capital, traders gain access to larger accounts provided by the firm.
When a trader performs well:
The trader earns a share of the profits
The firm earns a return on the capital it has allocated
This win-win structure creates a partnership:
The firm supplies funding and risk coverage
The trader contributes expertise and strategy
By funding traders, we can tap into more trading opportunities across markets and reward talent without hiring full-time staff. It also helps reduce risk exposure for the firm by only allocating capital to proven traders.