Profit Split Models in Prop Trading: Understanding How Firms Share Profits

Profit split models are a cornerstone of proprietary trading, defining how profits generated by traders are shared with the prop trading firms that provide the capital. These agreements not only incentivize traders to perform well but also determine the financial viability of joining a proprietary trading firm. For aspiring traders, understanding what profit splits are in trading and how they work is essential to choosing the right prop firm.

Profit Split Models in Prop Trading

In this guide, we’ll explore the various profit split models in prop trading, the factors that influence profit-sharing agreements, and the proprietary trading firms offering the best profit splits in the industry.

A profit split in prop trading refers to the percentage of profits a trader retains after successfully generating returns on the capital allocated by the proprietary trading firm. For instance, If a trader earns $10,000 in profit with an 80/20 profit split, they keep $8,000, while the firm retains $2,000.

Profit-sharing agreements vary widely between firms, ranging from 50/50 splits to 90%-100% splits for top-performing traders.

Profit splits are determined by the firm’s revenue model and the trader’s level of funding. Here’s how they generally operate:

Initial Agreement: When traders join a firm, they agree to a predefined profit split based on the firm’s policies. Most firms offer profit splits ranging from 80% to 90% for funded traders.

Performance-Based Adjustments: Many firms increase profit splits as traders demonstrate consistent performance or meet specific milestones.

  • Example: A trader with FTMO starts with an 80/20 split, but this may increase to 90/10 with consistent profitability.

Payout Frequency: Profit splits are typically paid on a weekly, bi-weekly, or monthly basis. Some firms, like Funding Pips, offer flexible payout cycles.

Retention for Operational Costs: The percentage retained by the firm is often used to cover operational expenses, including platform fees, risk management systems, and scaling programs.

1. Fixed Profit Splits: In this model, the profit-sharing percentage remains constant, regardless of the trader’s performance.

Example Firms:
  • BluFX: Offers a consistent 50/50 profit split for its funded traders.
  • Maven: Provides 80/20 splits for all funded accounts.
Pros:
  • Simplicity and predictability.
  • Ideal for traders seeking stable agreements.
Cons:
  • Lack of incentives for high performers to earn better splits.

2. Performance-Based Profit Splits: Performance-based splits reward traders with higher profit-sharing percentages as they demonstrate consistent profitability and adherence to risk management rules.

Example Firms:
  • FTMO: Offers an initial 80/20 split, which can increase to 90/10 or more based on trader performance.
  • Hantec Trader: Provides scaling opportunities with profit splits of up to 90%.
Pros:
  • Encourages consistent trading and risk management.
  • Incentivizes traders to perform at their best.
Cons:
  • Requires meeting specific milestones, which may not suit beginners.

3. Milestone-Based Profit Splits: In this model, traders unlock higher profit splits as they hit predefined milestones, such as achieving a profit target or managing larger accounts.

Example Firms:
  • The5%ers: Starts with a lower split (e.g., 50/50) but increases it as traders progress through scaling plans.
Pros:
  • Aligns incentives with trader growth.
  • Encourages long-term relationships between traders and firms.
Cons:
  • Initial splits may be less competitive.

4. Profit Splits for Instant Funding: Instant funding programs typically offer lower profit splits due to the higher risk assumed by the firm. However, they provide immediate access to trading capital.

Example Firms:
  • BluFX: Offers instant funding with a fixed 50/50 profit split.
  • Sabio Trade: Provides instant accounts with splits starting at 80/20.
Pros:
  • No evaluation process required.
  • Quick access to trading capital.
Cons:
  • Lower splits compared to evaluation-based accounts.

Here’s a comparison of profit splits offered by top proprietary trading firms:

Prop FirmProfit SplitsScaling OpportunitiesPayout Frequency
FTMO80% – 90%+25% account growth every 4 monthsBi-Weekly
The5%ers50% – 75%Double account size at milestonesWeekly
Hantec TradersUp to 90%Gradual increase when challenge completedBi-Weekly
E8 FundingUp to 90%Performance-based scalingBi-Weekly
Sabio Trade80%NAAny Time

If you want to get the most out of a prop firm’s profit-sharing model, follow these tips:

  • Choose Firms with Performance Incentives: Look for firms that reward consistent performance with higher profit splits. Examples include E8 Funding and Hantec Traders, which offer up to 90% splits for top traders.
  • Adhere to Risk Management Rules: Most firms increase profit splits for traders who strictly follow daily loss limits and maximum drawdowns.
  • Focus on Long-Term Consistency: Rather than chasing short-term profits, aim for steady growth over time. This increases your chances of unlocking milestone-based splits.
  • Leverage Advanced Strategies: Use trading tools and platforms like MT4, MT5, and cTrader to refine your strategies and improve profitability.
1. What is the best profit split model in proprietary trading?

The best model depends on your trading style. Performance-based splits (e.g., 80%-90%) are ideal for consistent traders, while fixed splits offer stability.

2. Which prop firms offer the highest profit splits?

Firms like Hantec Trader and E8 Funding offer some of the highest splits, with rates up to 90%-100% for top performers.

3. How do profit splits work in milestone-based models?

In milestone-based models, traders unlock higher splits as they meet profit targets or grow their accounts. For example, a trader may start with 50% and progress to 75% over time.

4. Do instant funding programs offer competitive splits?

Instant funding programs often have lower splits (e.g., 50%-75%) due to the higher risk for the firm. However, they provide faster access to trading capital.

5. Are profit splits taxed?

Yes, profit splits are typically subject to taxation based on the trader’s country of residence and tax laws.

Profit split models are one of the most critical aspects of proprietary trading, influencing trader profitability and firm selection. By understanding the different types of profit-sharing agreements—fixed, performance-based, milestone-based, and instant funding—traders can make informed decisions about which prop firm to join.

Whether you prioritize high splits, rapid scaling, or consistent payouts, firms like FTMO, Hantec Trader, and E8 Funding offer competitive profit-sharing models tailored to your needs. Choosing the right firm and maximizing your split through consistent performance can significantly enhance your trading career.

Looking for the best profit splits in prop trading? Explore our detailed reviews of FTMO, E8 Funding, and Hantec Trader to find the perfect firm for your trading journey!

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Best Brokers

FTMO offers funding challenges priced between €155 and €1,080, with account sizes ranging from $10,000 to $200,000. The evaluation process includes 2 steps, requiring a 10% profit target in Phase 1 and 5% in Phase 2, while adhering to a 5% daily loss limit and a 10% maximum drawdown. Funded traders receive an 80% profit split, with account scaling increasing by 25% every 4 months for consistent performance. FTMO is highly rated, with a 4.8/5 Trustpilot rating.

How we scored

Programs Offered (5/5), Profit Split & Pricing (4.5/5), User Experience (5/5), Support & Education (4.5/5)

Instant Funding offers flexible proprietary trading with account sizes from $1,250 to $200,000 and profit splits up to 90%. Choose from Instant Funding, One-Phase, or Two-Phase models with a scaling plan up to $1.28M. Enjoy weekly payouts, diverse tradable assets, and fast execution on DX Trade, cTrader, and Match-Trader. Rated 4.6/5 on Trustpilot, Instant Funding is a trusted choice for traders seeking fast funding and high earnings potential.

How we scored

Programs Offered (4.8/5), Profit Split & Pricing (5/5), User Experience (4.5/5), Support & Education (4.7/5)

Sabio Trade offers a streamlined 1-step evaluation process with account sizes ranging from $20,000 to $650,000 and profit splits of 80%. Traders benefit from a low-risk environment with 10% profit targets and 5% daily drawdown limits. Powered by the Quadcode platform, Sabio Trade provides access to over 250 assets, on-demand payouts, and top-tier educational resources. Trustpilot Rating: 4.1/5.

How we scored

Programs Offered (4.7/5), Profit Split & Pricing (4.5/5), User Experience (4.6/5), Support & Education (5/5)

Hantec Trader offers flexible funding options ranging from $2,000 to $200,000 with competitive profit splits of up to 90%. With its straightforward 1 or 2-step evaluation models, achievable profit targets, and trust pilot rating of 4.6/5, Hantec Trader stands out as a reliable proprietary trading firm. Traders can enjoy incremental growth opportunities, transparent risk management, and a smooth payout process every 14 to 30 days.

How we scored

Programs Offered (4.8/5), Profit Split & Pricing (4.6/5), User Experience (4.7/5), Support & Education (4.5/5)