Proprietary trading, also known as prop trading, is a type of trading where a firm or individual trades with their own money instead of clients’ money. Prop trading firms offer two types of programs: subscription and challenge. Subscription programs require traders to pay a monthly fee to access the firm’s trading platform, while challenge programs require traders to pass a trading evaluation to become a funded trader. In this article, we will compare subscription and challenge prop trading and help you decide which one is better for you.

Understanding the Differences Between Subscription and Challenge Prop Trading

Subscription Prop Trading

Subscription prop trading is a program where traders pay a monthly fee to access the firm’s trading platform. The fee can range from a few hundred to a few thousand dollars per month, depending on the firm and the trader’s level of access. Subscription programs offer traders access to the firm’s trading tools, education, and support. However, traders are not funded by the firm, and they trade with their own money. Subscription programs are suitable for traders who have their own capital and want to access a firm’s trading platform and resources.

Challenge Prop Trading

Challenge prop trading is a program where traders have to pass a trading evaluation to become a funded trader. The evaluation usually consists of a simulated trading test where traders have to meet certain profit targets and risk management rules. If traders pass the evaluation, they become funded traders and trade with the firm’s capital. The firm takes a percentage of the profits generated by the trader, and the trader keeps the rest. Challenge programs offer traders the opportunity to trade with a firm’s capital and earn a share of the profits. However, traders have to pass a challenging evaluation to become funded traders.

Subscription vs Challenge Prop Trading: Which is Better?

The answer to this question depends on your trading goals and resources. If you have your own capital and want to access a firm’s trading platform and resources, subscription prop trading may be a good option for you. Subscription programs offer traders access to a firm’s trading tools, education, and support, but traders have to trade with their own money.

If you want to trade with a firm’s capital and earn a share of the profits, challenge prop trading may be a good option for you. Challenge programs offer traders the opportunity to become funded traders and trade with the firm’s capital. However, traders have to pass a challenging evaluation to become funded traders.

In conclusion, both subscription and challenge prop trading have their pros and cons. Subscription programs offer traders access to a firm’s trading platform and resources, but traders have to trade with their own money. Challenge programs offer traders the opportunity to become funded traders and trade with the firm’s capital, but traders have to pass a challenging evaluation. It’s important to evaluate your trading goals and resources before choosing a prop trading program.