Prop Firm Glossary

Account size

The nominal account tier offered by a firm (often tied to rules/limits).

Also: 50k account, 100k account

Activation fee

A one-time fee to activate the funded stage after passing evaluation.

Also: funded account activation fee

Allocation limit

The maximum capital or number of accounts a trader can control with one firm.

Also: max funding, max accounts

Automated trading

Using algorithms/automation to execute trades; allowed/restricted by firm.

Also: algo trading, EA trading

1 term

Bracket order

Combined take-profit and stop-loss order structure.

Also: TP/SL bracket

7 terms

Challenge

The structured evaluation program (profit target + drawdown/rules) required to get funded.

Also: prop firm challenge, funding challenge

Commission

Broker/firm fee per trade (often quoted per side or round turn).

Also: round turn, RT commission

Consistency rule

Limits how much of total profit can come from one day/trade period.

Also: consistency requirement, payout consistency

Contract limit

Futures-specific version of max position: max number of contracts allowed.

Also: max contracts, max lots

Contract rollover

Switching exposure from the expiring contract to a later month.

Also: roll, rollover date

Copy trading

Automatically copying trades from another account; often prohibited.

Also: trade copier, mirrored trading

CQG

Futures trading infrastructure used by many brokers/prop firms.

Also: CQG data feed

6 terms

Daily loss limit

Maximum loss allowed in a single day before breach.

Also: max daily loss, daily drawdown

Data feed

Price/volume data delivery (Rithmic, CQG, etc.).

Also: market data

Day trading margin

Reduced margin requirement when positions are opened/closed within the session.

Also: intraday margin

DCA policy

Rules around averaging into positions (often restricted).

Also: averaging down rule, add to losers

DOM

Order book view showing bids/asks across levels.

Also: depth of market

Drawdown lock

Mechanism that “locks” the max drawdown level as the account grows.

Also: locked drawdown, drawdown stop moving

3 terms

EOD drawdown

Drawdown calculated at the end of the trading day (not continuously).

Also: end-of-day drawdown

Evaluation

A testing stage where you must hit targets while following risk rules to qualify for funding.

Also: evaluation account, eval phase

Expiration

Date the futures contract stops trading / expires.

Also: expiry

3 terms

Front month

The nearest-to-expiration, most active contract month.

Also: nearby contract

Funded account

An account a trader receives after meeting requirements, eligible for payouts under firm rules.

Also: funded prop account, live funded account

Futures contract

Agreement to buy/sell an asset at a future date/price on an exchange.

Also: futures, contract

1 term

Grid trading

Multiple layered orders around price; often restricted like DCA/martingale.

Also: grid strategy, grid bot

2 terms

Hedging rule

Restricts holding opposing positions simultaneously (varies by firm/platform).

Also: hedge restriction, opposite positions

HFT

Extremely fast execution strategies; commonly restricted or reviewed by firms.

Also: high-frequency trading, latency arbitrage

4 terms

Inactivity rule

Limits how long you can go without trading before penalties/closure.

Also: inactive account, dormancy

Inconsistent sizing

Large, unexplained variation in size that firms may flag as risky behavior.

Also: size inconsistency, lot inconsistency

Individual use

Account must be traded by a single individual—no sharing/operators.

Also: one trader rule, account sharing

Instant funding

Funding model where you skip a traditional evaluation (often higher fees/constraints).

Also: no challenge funding, direct funding

4 terms

Limit order

Order to buy/sell at a specified price or better.

Also: resting limit

Limit up / limit down

Exchange-imposed price limits; relevant to “price limit rule” discussions.

Also: LULD, exchange limits

Liquidity

Ease of entering/exiting without major slippage.

Also: market liquidity

Live trailing drawdown

Trailing drawdown that updates in real-time as balance/equity changes.

Also: intraday trailing drawdown, real-time trailing

10 terms

Maintenance margin

Minimum equity required to keep a futures position open.

Also: maint margin

Margin

Capital required to open/hold a futures position (exchange/broker rules).

Also: initial margin, maintenance margin

Mark-to-market

Daily profit/loss settlement mechanism for futures accounts.

Also: daily settlement, MTM

Market order

Order to buy/sell immediately at best available price.

Also: market execution

Martingale

Increasing size after losses; frequently prohibited as “risk escalation.”

Also: martingale strategy rule

Max drawdown

The maximum total loss allowed (mechanics vary by trailing/static/EOD).

Also: maximum drawdown rule

Maximum position

The largest allowed position size per trade / total open exposure.

Also: max contracts, max size

Micro futures

Smaller-sized futures contracts designed for lower margin/risk.

Also: micro contract

Mini futures

Standard “smaller than full-size” futures contract (e.g., E-mini indexes).

Also: e-mini, mini contract

Minimum payout

Smallest amount you can withdraw in one request.

Also: minimum withdrawal

3 terms

Negative P&L rule

Rules limiting payouts/actions when performance is negative.

Also: negative pnl restriction

News trading

Trading during major economic releases; some firms restrict/prohibit it.

Also: trade during news, news restriction

NinjaTrader

Popular futures platform; often supported in prop firm ecosystems.

Also: NT platform

3 terms

OCO

Linked orders where filling one cancels the other (brackets).

Also: one cancels other

One-step challenge

Evaluation with one phase instead of a multi-step process.

Also: 1-step evaluation, single phase challenge

Open interest

Number of open contracts held in the market (liquidity metric).

Also: OI

7 terms

Payout

Money paid out to the trader under a firm’s payout policy and eligibility rules.

Also: withdrawal, profit withdrawal

Payout cycle

The recurring window when payout requests are allowed (weekly/biweekly/monthly).

Also: payout schedule, payout period

Point value

Dollar value of a full point move (common for index futures).

Also: dollar per point

Price limit rule

Restrictions tied to exchange price limits / market conditions.

Also: limit up limit down, exchange price limit

Profit split

The percentage of profits the trader keeps vs the firm.

Also: payout split, profit share

Profit target

The required profit amount/percentage to pass an evaluation phase.

Also: target profit, profit goal

Prop firm

A firm that provides traders capital to trade, usually via an evaluation or direct funding model.

Also: proprietary trading firm, prop trading company

4 terms

Reset fee

Fee to reset an evaluation after failure or to restart metrics (varies by firm).

Also: evaluation reset, account reset

Restricted countries

Jurisdictions where traders can’t participate due to compliance/regulation.

Also: country restrictions, banned countries

Rithmic

Common futures data feed/connection used by prop firms.

Also: Rithmic feed

Rule breach

Event where a trader violates a rule (drawdown, daily loss, etc.) and fails the account.

Also: account breach, violation

7 terms

Scaling plan

Rules that increase account size after hitting performance targets.

Also: scaling rule, account growth

Scaling rule

The formal rule set governing when/how scaling happens.

Also: scale up rule

Settlement price

Official end-of-session price used for daily P&L and margining.

Also: settle

Simulated funded

Some “funded” accounts operate in simulated environments while still paying performance-based payouts.

Also: demo funded, simulated trading

Slippage

Difference between expected and actual fill price.

Also: fill slippage

Static drawdown

Drawdown limit that does not move up as you profit.

Also: fixed drawdown, end-stop drawdown

Stop order

Triggered order when price hits a stop level (risk management).

Also: stop loss order

7 terms

Tick size

Smallest price increment a futures contract can move.

Also: minimum price fluctuation

Tick value

Dollar value of one tick move (varies by contract).

Also: dollar per tick

Trading days

The number of distinct days you must trade to pass or request payouts.

Also: minimum trading days, active days

Trading hours

Specific times you’re allowed to trade under a firm’s rules.

Also: allowed trading hours, trading window

Tradovate

Futures trading platform used by many retail/prop programs.

Also: Tradovate platform

Trailing drawdown

Drawdown limit that moves with account performance (method varies by firm).

Also: trailing DD, moving drawdown

Two-step challenge

Evaluation requiring two phases (often “challenge” + “verification”).

Also: 2-step evaluation, phase 1 phase 2

1 term