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Based in Exeter - working across prop trading firms worldwide

Glossary · Payouts

Payout reserve

  • Also called
  • payout liability
  • reserve fund
  • liability reserve

What it means

In a prop firm, revenue arrives up front as fees while payouts arrive later and unevenly. A payout reserve holds part of that revenue back to cover the liability building up in simulated funded accounts, rather than spending it on marketing or operations.

Sizing a reserve starts with current open liability: profit sitting in simulated funded accounts that could be requested this cycle. Firms add a margin for a strong market month, correlated traders, and delays in payment processor settlements and rolling reserves.

Firms that collapsed or paused payouts in past years generally had a liability problem before they had a public problem.

Related terms

Read these next.

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.
Risk and drawdown

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.
Running the business

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.
Payouts

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.
Risk and drawdown

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.

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 Payout Reserve: How Much Cash to Hold

How to size a prop firm payout reserve in 2026: a scenario method, a worked example, published pass and payout rates, and the rules that cap exposure.
Guide

How to Start a Prop Firm in 2026: An Operator's Guide

How to start a prop firm in 2026, from operators: market, platform, challenge rules, payout reserve, payments, costs, website, marketing and a 90-day plan.

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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