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What Is a Profit Split

The profit split is the percentage of profits that a trader receives from their funded account. It determines how earnings are shared between the trader and the prop firm after successful trading performance. This rule only applies to funded accounts, as no payouts are issued during evaluations. The profit split is one of the most important policies to understand before beginning with any firm because it directly affects a trader’s earnings and is strictly enforced.

How It Works

When a trader earns profits in a funded account, the firm will distribute a portion of those profits to the trader based on the agreed profit split. For example, a 90 percent split means the trader keeps 90 percent of all realized profits, while the firm retains the remaining 10 percent. This percentage applies only to net profits after any applicable fees, taxes, or payout conditions have been met. Some firms may also require a minimum withdrawal amount or restrict payouts to certain intervals, which further impacts how the profit split functions in practice.

The split is typically calculated on a per-payout basis, meaning each time a payout is requested and approved, the agreed percentage is applied to the profit being withdrawn. The remaining share is retained by the firm and is not credited back to the trader at a later time.

Why Firms Have Profit Splits

Prop firms offer funded accounts with the goal of managing risk while allowing traders to benefit from successful performance. The profit split allows firms to recover part of the risk they take on by sharing in the trader’s gains. Since the firm provides the account, platform access, and capital, they earn a portion of the returns. This model ensures that the firm only earns when the trader is profitable, aligning both parties around consistent performance.

Profit splits are a core part of the prop trading business model. They are used to fund the firm’s operations, provide support infrastructure, and continue offering opportunities to new traders. The split also encourages traders to manage risk wisely, knowing they will retain the majority of profits if they perform consistently.

Differences to Understand

Profit split percentages vary widely across firms. Some firms offer high splits such as 90 or 95 percent, while others may start lower at 50 or 60 percent and scale upward based on account growth or the number of successful payouts. The split can also vary within the same firm depending on the specific account size, plan type, or progression milestones.

For example, a $50,000 account may offer an 80 percent split by default, while a $150,000 account under the same firm may start at 90 percent. Some firms also increase the trader’s split after a certain number of successful payouts or based on time in the funded program. Others may lock the split from the beginning without change.

It is critical for traders to check the profit split details before starting any evaluation. The terms are usually fixed once the account begins, and firms do not allow traders to negotiate or change the percentage after activation. Starting an account without reviewing the split can result in unexpected payout reductions or misunderstandings that cannot be reversed later.

Summary

Automated trading is permitted by some firms and restricted by others. Even when allowed, it must be used responsibly and without attempting to gain an advantage through speed, frequency, or technical manipulation. Traders may be able to use EAs or scripts that follow structured strategies, but they must operate within normal trade behavior and remain compliant with all platform rules. Because automated trading often leads to manual inspection, especially during payout review, it is essential to fully understand each firm's policy before using any type of automated system.