# What is 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.

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

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.

## Why it matters

Understanding your book model is understanding your business. A B-book firm needs reserves, payout caps and a risk engine sized for its worst month, not its average. On the website you do not need to discuss book models, but you must not imply live market execution or real capital you do not provide.