Funded account — The account a trader is given after passing an evaluation, where profits become eligible for payout under the firm's rules.
How funded account works in prop trading
A funded account is the stage after the evaluation. The profit target usually disappears, but the risk rules do not — drawdown, daily loss limits, position caps, and prohibited strategies all carry over, and a new layer of payout rules appears on top. Many traders are surprised that the funded stage is where the rulebook gets longer, not shorter.
What is actually in the account varies. Some firms place you on live capital, some on a simulated feed with real payouts tied to your performance, and some run a hybrid where a subset of traders is copied to live. The payout obligation is real in all three cases; the distinction matters for how you read the firm's risk disclosures rather than for how you get paid.
Key points
- Risk rules survive the evaluation. Drawdown and daily loss limits generally apply for the life of the account.
- The funded stage adds payout-specific requirements — minimum trading days, consistency checks, and often a profit buffer before the first withdrawal.
- Many firms charge a one-time activation fee or a recurring monthly fee to keep the funded account open.
- Breaching a rule on a funded account normally closes it permanently; a reset is usually only offered on evaluations.
Example
A trader passes a $50,000 evaluation and activates the funded account. The 90% profit split, $2,000 trailing drawdown, and 5-contract cap all carry over, and a new rule appears: no payout until the account holds a $2,600 balance and 10 trading days are logged.
Also known as
- funded prop account
- live funded account
- funded stage
Frequently asked questions
Is a funded account real money?
It depends on the firm. Some route funded traders to live capital, others keep the funded stage simulated and pay performance-based payouts from company revenue. The payout is real either way. Firms are required to disclose which model they use, and it is normally stated in the terms of service rather than the marketing pages.
Can you lose a funded account?
Yes. Breaching the maximum drawdown, the daily loss limit, or a prohibited-strategy rule normally ends the account. Some firms also close accounts for prolonged inactivity or for violating the one-trader rule. Unlike an evaluation, a breached funded account usually cannot be reset — you start again from a new evaluation.
Put this into practice
Funded account is described here as a plain-language educational definition. Firms, platforms, and account programs may apply different conditions or calculations. Verify the current official terms before using this definition to make an account decision.