# Prop firm glossary

> Prop trading, evaluation and prop-firm business terms, defined.

- Source: https://pipvalley.com/glossary
- Publisher: PipValley - web design studio for prop trading firms
- Updated: 2026-10-03

- [A-book](https://pipvalley.com/glossary/a-book): A-book describes trades the firm passes to a real market or liquidity provider; in prop firms, it usually means mirroring selected traders' positions with live capital.
- [Account reset](https://pipvalley.com/glossary/account-reset): An account reset restores a prop firm evaluation account to its starting balance and rules, usually for a fee lower than a new challenge, after a breach or on request.
- [Affiliate program](https://pipvalley.com/glossary/affiliate-program): An affiliate program pays partners such as creators, educators and comparison sites a commission on prop firm sales they refer, tracked by links and coupon codes.
- [AI search and GEO](https://pipvalley.com/glossary/generative-engine-optimization): Generative engine optimization (GEO) is the practice of making content easy for AI assistants and AI search features to find, understand and cite accurately.
- [AML](https://pipvalley.com/glossary/aml): AML (anti-money laundering) covers the checks and controls that stop a business being used to move illicit funds, including sanctions screening and source-of-funds review.
- [B-book](https://pipvalley.com/glossary/b-book): B-book describes trades the firm does not pass to a market: in prop firms, simulated trades that stay internal, with payouts funded from the firm's own revenue.
- [CFTC](https://pipvalley.com/glossary/cftc): The CFTC (Commodity Futures Trading Commission) is the US federal regulator of futures, options and swaps markets, relevant to prop firms offering futures or US-facing products.
- [Challenge fee](https://pipvalley.com/glossary/challenge-fee): A challenge fee is the one-time price a trader pays to start a prop firm evaluation; some firms refund it with the first payout, others never do.
- [Chargeback](https://pipvalley.com/glossary/chargeback): A chargeback is a card payment reversed by the cardholder's bank after a dispute, which costs a prop firm the sale, a fee and points against its chargeback ratio.
- [Consistency rule](https://pipvalley.com/glossary/consistency-rule): A consistency rule is a prop firm rule that limits how much of a trader's total profit can come from a single day or trade, to stop one outlier result from passing or paying out.
- [Conversion rate](https://pipvalley.com/glossary/conversion-rate): Conversion rate is the share of visitors or sessions that complete a goal, such as buying an evaluation, measured per page, channel or step of checkout.
- [Copy trading policy](https://pipvalley.com/glossary/copy-trading-policy): A copy trading policy sets whether a trader may copy trades between their own accounts, from others, or from signal services, and what limits apply.
- [Core Web Vitals](https://pipvalley.com/glossary/core-web-vitals): Core Web Vitals are Google's three field metrics for page experience: Largest Contentful Paint, Interaction to Next Paint and Cumulative Layout Shift.
- [CPA](https://pipvalley.com/glossary/cpa): CPA (cost per acquisition) is what a prop firm pays to win one paying customer, either as a fixed affiliate fee per sale or as total marketing spend divided by new buyers.
- [cTrader](https://pipvalley.com/glossary/ctrader): cTrader is Spotware's multi-asset trading platform for forex and CFDs, offered to brokers and prop firms with web, desktop and mobile apps and an open API.
- [Daily loss limit](https://pipvalley.com/glossary/daily-loss-limit): A daily loss limit is the most a trader may lose in one trading day in a prop firm account, measured from a defined daily starting point; crossing it ends the account.
- [DXtrade](https://pipvalley.com/glossary/dxtrade): DXtrade is Devexperts' white-label trading platform for forex, CFD and crypto, used by brokers and prop firms that want a branded web and mobile terminal.
- [EA policy](https://pipvalley.com/glossary/ea-policy): An EA policy is a prop firm's rules on expert advisors, bots and other automated trading: which are allowed, which are banned, and how the firm checks.
- [End-of-day drawdown](https://pipvalley.com/glossary/end-of-day-drawdown): An end-of-day drawdown is a trailing maximum loss limit that updates only at the daily close, so intraday open profit does not raise the breach level.
- [ESMA](https://pipvalley.com/glossary/esma): ESMA (European Securities and Markets Authority) is the EU's securities markets authority, which coordinates national regulators and sets common standards for products such as CFDs.
- [Evaluation](https://pipvalley.com/glossary/evaluation): An evaluation is the paid, rule-bound test a prop firm sells, in which a trader must hit a profit target in a simulated account without breaking any risk rule.
- [FAQ center](https://pipvalley.com/glossary/faq-center): A prop firm FAQ center is the searchable help section that answers trader questions on rules, payouts, platforms, KYC and payments before they reach support.
- [FCA financial promotion](https://pipvalley.com/glossary/fca-financial-promotion): A financial promotion is a communication inviting someone into investment activity; in the UK, the FCA regime restricts who may make them and how, which affects some prop marketing.
- [High-risk merchant account](https://pipvalley.com/glossary/high-risk-merchant-account): A high-risk merchant account is a card processing account for businesses acquirers consider risky, such as prop firms, with higher fees, reserves and stricter monitoring.
- [hreflang](https://pipvalley.com/glossary/hreflang): hreflang is an HTML or sitemap annotation that tells search engines which language or regional version of a page to show to which users.
- [Hybrid model](https://pipvalley.com/glossary/hybrid-book): A hybrid model is a prop firm or broker risk setup that keeps most flow internal (B-book) and routes selected traders or positions to a live market (A-book).
- [Instant funding](https://pipvalley.com/glossary/instant-funding): Instant funding is a prop firm product that skips the evaluation: the trader pays a higher fee and starts directly in a simulated funded account with payout eligibility.
- [KYC](https://pipvalley.com/glossary/kyc): KYC (know your customer) is the identity verification a prop firm runs on traders, usually ID document, liveness and address checks, most often before the first payout.
- [Landing page](https://pipvalley.com/glossary/landing-page): A landing page is a page built for one traffic source and one action, such as an affiliate's audience or a single program, rather than for general browsing.
- [Liquidity provider](https://pipvalley.com/glossary/liquidity-provider): A liquidity provider (LP) is a bank, prime broker or non-bank market maker that streams prices and fills orders, which a prop firm or broker connects to for live execution.
- [llms.txt](https://pipvalley.com/glossary/llms-txt): llms.txt is a proposed plain-text file at a site's root that gives large language models a curated, markdown summary of the site and links to its most useful pages.
- [LTV](https://pipvalley.com/glossary/lifetime-value): LTV (lifetime value) is the total net revenue a prop firm earns from one trader across every evaluation, reset and add-on they buy, minus the rewards paid to them.
- [Marketing claims](https://pipvalley.com/glossary/marketing-claims): Marketing claims are statements a prop firm makes to sell its programs, such as payout totals, pass rates, speed and income; each must be accurate, sourced and not misleading.
- [Match-Trader](https://pipvalley.com/glossary/match-trader): Match-Trader is Match-Trade Technologies' trading platform for forex and CFD brokers, with a prop firm product that bundles the platform with evaluation management.
- [Maximum loss limit](https://pipvalley.com/glossary/maximum-loss-limit): A maximum loss limit is the total drawdown a prop firm account may reach before it is closed, set as a static, trailing or end-of-day level below the starting balance.
- [Merchant category code](https://pipvalley.com/glossary/merchant-category-code): A merchant category code (MCC) is the four-digit code card networks use to classify what a merchant sells; it affects approval, fees and how issuers treat a prop firm's charges.
- [MetaTrader 4 and 5](https://pipvalley.com/glossary/metatrader): MetaTrader 4 and MetaTrader 5 are MetaQuotes' retail trading platforms, long the default for forex and CFD prop firms, with access now subject to MetaQuotes' own licensing decisions.
- [MiCA](https://pipvalley.com/glossary/mica): MiCA (Markets in Crypto-Assets Regulation) is the EU regulation for crypto-asset issuers and service providers, relevant to prop firms that take or pay in crypto or stablecoins.
- [Minimum trading days](https://pipvalley.com/glossary/minimum-trading-days): Minimum trading days is a prop firm rule requiring a trader to place trades on a set number of separate days before an evaluation phase can pass or a payout can be requested.
- [Multi-accounting](https://pipvalley.com/glossary/multi-accounting): Multi-accounting is when one person controls several prop firm accounts under different identities, or several people coordinate trades, to bypass allocation and risk limits.
- [News trading rule](https://pipvalley.com/glossary/news-trading-rule): A news trading rule restricts opening or closing trades in a window around scheduled high-impact economic releases, usually only on simulated funded accounts.
- [NFA](https://pipvalley.com/glossary/nfa): The NFA (National Futures Association) is the US self-regulatory organization for the derivatives industry, whose members include brokers, introducing brokers and advisors.
- [NinjaTrader](https://pipvalley.com/glossary/ninjatrader): NinjaTrader is a futures trading platform and brokerage whose desktop charting and automation software is widely used by futures prop firm traders.
- [One-step challenge](https://pipvalley.com/glossary/one-step-challenge): A one-step challenge is an evaluation with a single phase: the trader hits one profit target under the risk rules and then moves straight to the simulated funded stage.
- [Pass rate](https://pipvalley.com/glossary/pass-rate): Pass rate is the share of prop firm evaluations that end in a pass rather than a breach, measured per phase or end to end; it drives payout liability.
- [Payment processor](https://pipvalley.com/glossary/payment-processor): A payment processor moves card and other payments between a prop firm's checkout, the card networks and the acquiring bank that settles funds to the firm.
- [Payout cap](https://pipvalley.com/glossary/payout-cap): A payout cap limits how much a trader can withdraw in a single payout or period, often as a fixed amount or a percentage of the simulated account's starting balance.
- [Payout cycle](https://pipvalley.com/glossary/payout-cycle): A payout cycle is the schedule on which a prop firm lets funded traders request performance rewards, such as on demand, weekly, bi-weekly or monthly, plus its first-payout rule.
- [Payout proof](https://pipvalley.com/glossary/payout-proof): Payout proof is evidence that a prop firm actually pays traders, such as payout certificates, transaction records or third-party verified data, shown on its site and socials.
- [Payout ratio](https://pipvalley.com/glossary/payout-ratio): Payout ratio is the share of a prop firm's revenue paid out to traders as performance rewards over a period, the key measure of whether the model is sustainable.
- [Payout reserve](https://pipvalley.com/glossary/payout-reserve): A payout reserve is cash a prop firm sets aside to cover expected and worst-case performance rewards, so it can keep paying traders through a bad month.
- [Performance reward](https://pipvalley.com/glossary/performance-reward): A performance reward is the payment a prop firm makes to a trader based on results in a simulated funded account; it is the compliant name for a prop payout.
- [Pricing table](https://pipvalley.com/glossary/pricing-table): A prop firm pricing table lists each program and account size with its fee and core rules side by side, so traders can compare and buy without opening the rules page.
- [Profit split](https://pipvalley.com/glossary/profit-split): A profit split is the share of a simulated funded account's profit a prop firm pays the trader as a performance reward, with the rest retained by the firm.
- [Profit target](https://pipvalley.com/glossary/profit-target): A profit target is the gain, usually a percentage of starting balance, a trader must reach in a prop firm evaluation phase to pass it, without breaking any risk rule.
- [ProjectX](https://pipvalley.com/glossary/projectx): ProjectX is a futures trading platform and back end from the Topstep group, built for prop trading, whose availability to other prop firms has changed over time.
- [Prop firm](https://pipvalley.com/glossary/prop-firm): A retail prop firm is a business that sells paid trading evaluations and pays performance rewards to traders who pass, usually within a simulated trading environment.
- [Prop firm challenge](https://pipvalley.com/glossary/prop-firm-challenge): A prop firm challenge is the marketing name for a paid evaluation: a trader buys a simulated account and must meet a profit target under fixed risk rules to qualify.
- [Prop firm CRM](https://pipvalley.com/glossary/prop-firm-crm): A prop firm CRM is the back-office system that holds traders, orders, accounts, KYC, payouts and affiliates, and connects checkout, platform and dashboard.
- [Restricted countries](https://pipvalley.com/glossary/restricted-countries): Restricted countries are the jurisdictions a prop firm will not sell to or pay out to, because of sanctions, regulation, payment provider terms or platform licensing.
- [Review gating](https://pipvalley.com/glossary/review-gating): Review gating is filtering which customers are invited to leave public reviews, for example only those who passed or were paid, so that ratings look better than reality.
- [Risk disclosure](https://pipvalley.com/glossary/risk-disclosure): A risk disclosure is the statement a prop firm publishes explaining that trading is risky, that accounts are simulated where they are, and that results are not typical or assured.
- [Risk engine](https://pipvalley.com/glossary/risk-engine): A risk engine is the software that watches every prop firm account in real time, enforces loss limits and rules, and flags prohibited trading behavior.
- [Rithmic](https://pipvalley.com/glossary/rithmic): Rithmic is a futures market data and order routing provider that many futures prop firms use to connect traders' platforms to simulated and live accounts.
- [Rolling reserve](https://pipvalley.com/glossary/rolling-reserve): A rolling reserve is a percentage of each card settlement an acquirer holds back for a set period to cover future chargebacks and refunds, then releases on a rolling basis.
- [Rules page](https://pipvalley.com/glossary/rules-handbook): A prop firm rules page is the single, canonical explanation of every evaluation and funded-stage rule, with definitions, worked examples and an update date.
- [Scaling plan](https://pipvalley.com/glossary/scaling-plan): A scaling plan is a prop firm's published path for increasing a trader's simulated allocation, profit split or both after they meet defined performance conditions.
- [Schema markup](https://pipvalley.com/glossary/schema-markup): Schema markup is structured data, usually JSON-LD using schema.org types, that tells search engines and AI systems what a page describes, such as an organization or product.
- [Simulated funded account](https://pipvalley.com/glossary/simulated-funded-account): A simulated funded account is the post-evaluation account a prop firm gives a trader: trades run in a simulated environment and the firm pays performance rewards on results.
- [Static drawdown](https://pipvalley.com/glossary/static-drawdown): A static drawdown is a maximum loss limit fixed at a set level below the starting balance that never moves, however much profit the account makes.
- [TradeLocker](https://pipvalley.com/glossary/tradelocker): TradeLocker is a newer web-first trading platform for forex and CFD brokers and prop firms, known for TradingView charting and a modern browser interface.
- [Trader dashboard](https://pipvalley.com/glossary/trader-dashboard): A trader dashboard is the logged-in area where a prop firm's traders see their accounts, live rule status, breach levels, certificates and payout requests.
- [Trading platform](https://pipvalley.com/glossary/trading-platform): A trading platform is the software traders use to place orders and see positions; for a prop firm, it also supplies the account data the risk engine and dashboard rely on.
- [Tradovate](https://pipvalley.com/glossary/tradovate): Tradovate is a cloud-based futures trading platform and brokerage, part of the NinjaTrader group, used by futures prop firms to provide simulated and live accounts.
- [Trailing drawdown](https://pipvalley.com/glossary/trailing-drawdown): A trailing drawdown is a maximum loss limit that moves up as the account reaches new highs, so the breach level follows the trader's peak rather than staying fixed.
- [Trust center](https://pipvalley.com/glossary/trust-center): A trust center is a website section that gathers a prop firm's company details, payout proof, policies, disclosures and review links in one place for traders and partners.
- [Two-step challenge](https://pipvalley.com/glossary/two-step-challenge): A two-step challenge is an evaluation split into two phases, usually a higher profit target first and a lower one in a verification phase, before simulated funding.
- [Volumetrica](https://pipvalley.com/glossary/volumetrica): Volumetrica is a futures trading and order-flow platform with a prop firm offering that combines charting, account infrastructure and evaluation management.
- [Weekend holding rule](https://pipvalley.com/glossary/weekend-holding-rule): A weekend holding rule decides whether a trader may keep positions open over the weekend market close, and what happens to positions that are still open.
- [White label](https://pipvalley.com/glossary/white-label): A white label is a technology product another company builds and runs that a prop firm sells under its own brand, such as a platform, challenge engine or a whole firm.