How US futures prop firms work: evaluations, simulated accounts, fees and the regulators

A US futures prop firm sells traders a paid evaluation, usually on a simulated account, with the promise of a share of profits if they pass and keep to the rules. Often, what follows the evaluation is simulated too: the firm pays rewards from its own money, and only some firms ever place a trader’s orders on an exchange. That makes the firm’s rules, finances and regulatory status more important than the headline account size.

This guide explains the model as it works in US futures. For the small print on payouts, see our guide to how prop firm payout rules work; for the contracts themselves, see how futures contracts work. It does not recommend or rank any firm.

Two meanings of “prop firm”

The CFTC’s glossary defines a proprietary trading group as an organization whose owners, employees or contractors trade in the name of accounts owned by the group and use only the group’s funds. That describes a traditional trading house: the firm’s own capital, at risk in real markets, through accounts held at a broker.

The retail evaluation firm is a different business. Its customers are the traders themselves, who pay to take part. The firm earns from those payments whether or not anyone trades a real contract. Keeping the two meanings apart explains much of the confusion.

How the evaluation works

A trader buys an evaluation for a stated account size. Prices are usually a monthly subscription or a one-off fee, and the account is a simulation: orders are filled against live or near-live market prices, but no order reaches the exchange.

To pass, the trader must reach a profit target without breaking a list of rules. The common ones are:

• A maximum loss, often a trailing drawdown that follows the account up as it makes money. Some firms measure it intraday, on the highest balance or equity reached during the session; others only at the end of each day.
• A daily loss limit, after which trading stops until the next session.
• A consistency rule, capping how much of the total profit may come from one day.
• Contract limits, a maximum number of contracts per instrument or across the account.
• Conduct rules, such as no positions held through certain scheduled news or past the session close.

Break a rule and the evaluation ends. The trader can then usually buy a reset, which restarts the same evaluation for a fee, or buy a new one. Passing often triggers a further charge, sometimes called an activation fee, before the next stage opens.

Example, with hypothetical numbers: a trader buys a $50,000 simulated evaluation for $150 a month with a $2,000 maximum loss, so the floor starts at $48,000. On day one the account closes at $50,800, and under an end-of-day trailing rule the floor moves up to $48,800. On day two the balance touches $51,500 during the session but closes at $50,600. The end-of-day floor stays at $48,800, leaving $1,800 of room; an intraday trailing rule would have lifted it to $49,500 at the high, leaving $1,100. Suppose the trader breaches once and pays a $100 reset, passes in the second month, then pays $40 a month for data for two months before requesting a $3,000 payout at a 90% split. The payout is $2,700; the costs are $300 in evaluation fees, $100 for the reset and $80 for data, $480 in all, leaving $2,220. Had the trader failed again instead, the $400 in evaluation fees and resets, plus the data fees, would simply have been spent.

Simulated, then live: what “funded” means

After passing, the trader is usually given a “funded” account. In many programs this is still a simulation. The trader earns a share of simulated profits, paid by the firm from its own money, under the payout rules: minimum trading days, a buffer above the drawdown floor, caps on early withdrawals and identity checks.

Some firms later move traders to a live account. In that arrangement the account normally belongs to the firm and is held at a futures commission merchant (FCM), which the CFTC describes as a firm that accepts orders and takes money to margin them. Trades are processed and settled through a clearing member of the exchange’s clearing organization, which may be the FCM itself. Segregation, the CFTC’s requirement that FCMs keep customer funds such as margin separate from their own, protects the account holder. Here that is the firm. An evaluation fee is the firm’s revenue, not margin sitting at an FCM, so it carries none of those protections.

Several businesses usually sit behind a trader’s screen: the prop firm, the platform company running the simulation and, for live accounts, the FCM and its clearer. Each has its own terms.

Data fees and platforms

Exchanges charge for real-time prices. CME Group, which owns the CME, CBOT, NYMEX and COMEX exchanges, says in its annual report that users of its basic service pay a flat monthly fee for each screen or device displaying its market data, and that its data revenue moves with the number of devices in use. Market data and information services made up 12% of its total revenue in 2025.

Prop firms pass this cost on in different ways: inside the evaluation price, as a separate monthly charge, or only once a trader is funded. How the trader is classified for data purposes, for example as a professional or non-professional user, can change the price. Platform licenses are a further cost in some programs.

How the firms make money

An evaluation firm’s revenue comes mainly from fees: evaluations, resets, activations and, in some cases, data mark-ups. Its main costs are payouts to successful traders, technology, data and marketing. Because the accounts are simulated, a trader’s losses are not anyone’s market gain; they simply end the account, and the fee stays with the firm. The business works financially when fees from many traders exceed payouts to a few.

That is not fraud in itself. It becomes a problem when the marketing says otherwise, for example by calling simulated accounts live, or when rules are used after the fact to refuse payment. The CFTC’s allegations against My Forex Funds, described below, were of this kind.

Where US regulators stand

The Commodity Exchange Act requires certain firms and individuals doing business in the derivatives industry to register with the CFTC, which has delegated registration to the National Futures Association (NFA). The categories are defined by activity. An FCM solicits or accepts orders and takes customer money to support them; an introducing broker solicits orders but does not take the money; a commodity trading advisor advises others for pay; a commodity pool operator pools other people’s money to trade. A firm that sells access to a simulator, takes no margin and places no customer orders does not fit neatly into any of them, so registration is something to check rather than assume.

In August 2023 the CFTC sued Traders Global Group, which traded as My Forex Funds. It alleged that more than 135,000 customers paid at least $310 million in fees; that the firm, not a third-party liquidity provider, was the counterparty to substantially all customer trades; that payouts came substantially from other customers’ fees, which the complaint likened to a Ponzi scheme; and that it used drawdown limits and execution software to reduce what it paid. The complaint also said the firm had never been registered with the CFTC in any capacity. The case concerned retail forex and other off-exchange transactions, not exchange-traded futures. In a statement delivered on 11 August 2023 and published by the CFTC in July 2024, Commissioner Caroline Pham said the complaint failed to make clear that the agency’s authority covers only leveraged, margined or financed retail commodity transactions, not all of them.

The allegations were never tested. A special master found that the CFTC had made false statements to the court, including describing transfers it had been told were tax payments to the Canadian tax authority as transfers to an unidentified account, and had acted willfully and in bad faith. On 13 May 2025 the judge adopted that report and dismissed the case with prejudice. In July 2025 the court ordered the CFTC to pay the defendants more than $3 million in fees and costs and closed the case. Acting Chairman Pham called the agency’s conduct inexcusable. Our enforcement tracker follows later actions.

When this guide was written in October 2026, we found no CFTC customer advisory dedicated to evaluation-model prop firms; the agency’s general fraud advisories are on its learning resources page.

What to check before paying

• Who the firm is: the legal entity, where it is based, and its record, if any, in NFA’s BASIC database.
• Whether every stage is simulated, and the exact point, if any, at which orders reach an exchange.
• How drawdown is measured: intraday or end of day, balance or equity, and whether it stops trailing.
• The full cost: evaluation, resets, activation, data and platform fees.
• The payout terms, and the clauses that let the firm void profits or close accounts.

Frequently asked questions

Are futures prop firm accounts real money? Evaluations are generally simulated, and many funded accounts are too. Some firms move traders to live accounts held in the firm’s name at an FCM. The terms you accept should say which applies at each stage.

Is a futures prop firm regulated by the CFTC? NFA’s BASIC database shows whether a firm is registered and in which category; a firm that only sells evaluations may not be registered at all. The My Forex Funds case shows the CFTC may still act against an unregistered firm where it believes its rules apply.

What is the difference between trailing and end-of-day drawdown? Both raise the maximum-loss floor as the account grows. An intraday rule follows the session’s highest level; an end-of-day rule uses only the closing balance, leaving more room after a gain that is partly given back.

Why do futures prop firms charge data fees? Exchanges charge for real-time prices, at CME Group per screen or device each month, and firms pass that cost on.

What happened in the CFTC’s My Forex Funds case? The CFTC sued in August 2023 alleging fraud. In May 2025 a federal court dismissed the case with prejudice as a sanction for the CFTC’s own conduct, without ruling on the allegations.