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Based in Exeter - working across prop trading firms worldwide

Glossary · Payouts

Payout ratio

  • Also called
  • payout-to-revenue ratio
  • payout percentage

What it means

In a prop firm, payout ratio is usually total performance rewards paid divided by total fee revenue for the same period. Some firms use net revenue after refunds, chargebacks and affiliate commissions, which gives a more honest figure.

The ratio moves with pass rate, profit split, scaling, payout caps and market conditions. A strong trending month can raise it sharply, which is why firms track it monthly and by cohort, not just annually.

Because payouts lag purchases, a quickly growing firm can show a low ratio that rises later as its funded cohort matures.

Related terms

Read these next.

Evaluations

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.
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

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.
Evaluations

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.
Running the business

LTV

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.

On your website

Where this shows up on a prop firm site.

Feature

Payout proof

Payout pages a skeptical trader can check: dated records from your platform's data, clear labels, and an honest empty state when there is nothing to show.
Tool

Payout Split & Schedule Planner

Compare profit splits, payout frequencies and minimums, and what each costs the firm.
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.

Looking for a prop firm to trade with, not a website? Compare firms on PropFirmPal, the comparison site our founder owns.Go to PropFirmPal →

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