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Based in Exeter - working across prop trading firms worldwide

Glossary · Risk and drawdown

B-book

  • Also called
  • B-booking
  • internalization
  • market making

What it means

In a prop firm, B-booking means the trader's orders are not hedged or placed with a liquidity provider. For a retail prop firm running a simulated environment, almost every evaluation trade is B-book by nature, and many funded-stage trades are too. The firm's costs are the performance rewards it pays.

The term comes from retail brokerage, where a B-book broker takes the opposite side of client trades. In a prop firm the trader has no deposit at risk beyond the fee, so the economics differ, but the risk principle is similar: the firm carries the outcome of the trader's results.

A purely B-book firm depends on fee revenue exceeding payouts over time, which is why pass rate, payout ratio and reserves matter.

Related terms

Read these next.

Risk and drawdown

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.
Risk and drawdown

Hybrid model

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).
Payouts

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.
Payouts

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.
Evaluations

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.

On your website

Where this shows up on a prop firm site.

Feature

Rules pages

Rules a trader can read one way: one page per rule, worked examples from your own numbers, and a table of which rules apply to which plan.
Tool

Drawdown Rule Visualiser

See exactly how static, trailing and end-of-day drawdown rules behave on the same equity curve.
Guide

What Is a B-Book Prop Firm? A-Book, B-Book and Hybrid

What B-book means at a prop firm, how A-book and hybrid models differ, what each costs, and how to describe your model honestly on your site.
Guide

Prop Firm Risk Management: A-Book and B-Book for Owners

Risk management for prop firm owners: B-book, A-book and hybrid models, hedging top traders, payout ratio, reserves and risk engine controls.

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