Run the numbers
How do prop firms make money?
Put in your challenge volume, price and payout assumptions. In under a minute you see monthly profit, the payout ratio and the pass rate where the model stops working.
RUN THE NUMBERS · NO SIGN-UP
Enter your numbers, see your margin and your breaking point.
Every default is labelled. Change any of them and every figure and the chart recalculate instantly.
At a 10% pass rate the firm keeps $12,070 a month after payouts and costs. Payouts take 34% of net sales. Above a 23% pass rate, payouts overtake what the fees bring in.
Margin on gross sales: 36.6%. Expected payout cost carried by each challenge sold: $47. A large account sold cheaply carries far more of that exposure than its price suggests.
Turn on JavaScript to change the numbers. The result above uses the default inputs.
Projections are hypothetical and depend entirely on the assumptions shown. Not financial advice. Trading on evaluation and funded accounts is simulated.
How it works
Every step, in plain words.
- 01
Gross fee revenue is challenges sold a month times the average price actually paid, after discounts.
- 02
Net fee revenue takes off processing, refunds and chargebacks, and affiliate commission, each as a share of gross sales.
- 03
Funded traders are sales times the pass rate across all phases. Of those, the share you set reaches a payout. Each payout is account size times profit at payout times the trader's split, plus the challenge fee when you refund it with the first payout.
- 04
Profit is net fee revenue minus payouts minus fixed monthly costs. The payout ratio is payouts divided by net fee revenue.
- 05
The break-even pass rate is where payout liability, which rises in a straight line with the pass rate, meets the fees left after costs. The chart draws both lines so you can see how much room the model has.
METHODThe formulas and every default, with where it comes from
gross = sales × price net = gross × (1 − processing% − affiliate%) funded = sales × passRate perPayout = accountSize × profitAtPayout% × split% perFunded = reachPayout% × (perPayout + (refundFee ? price : 0)) payouts = funded × perFunded profit = net − payouts − fixed payoutRatio = payouts ÷ net breakEvenPass= (net − fixed) ÷ (sales × perFunded)
| Input | Default | Kind | Note |
|---|---|---|---|
| Challenges sold a month | 200 | Assumption | Matches the defaults of a common public vendor calculator, so results are comparable. Use your own volume. |
| Average price paid | $165 | Assumption | Same source. Enter the price after discount codes, not list price. |
| Processing, refunds, chargebacks | 7% | Estimate | A planning figure for high-risk card processing plus refunds. Your processor statement has the real number. |
| Affiliate commission | 10% | Assumption | Averaged over all sales, including those with no affiliate. |
| Fixed monthly costs | $6,000 | Assumption | Platform, staff, tools and website care. Run the launch cost calculator for a line-by-line figure. |
| Pass rate (all phases) | 10% | Assumption | Not an industry average. Firms publish very different figures on different definitions, so use your own data. |
| Funded who reach a payout | 40% | Assumption | Many funded traders never request a payout. Change it to your own ratio. |
| Profit at payout | 5% | Assumption | Average simulated profit at the time of payout, as a share of account size. |
| Average account size | $25,000 | Assumption | Payout liability scales with account size, not with the price paid. |
| Profit split | 80% | Assumption | Deliberately conservative for the firm. Many firms advertise higher splits. |
| Fee refunded with first payout | On | Assumption | Adds the challenge price to each first payout. |
Questions
Asked about this tool.
Are prop firms profitable?
Some are and many are not. A firm is profitable when challenge fees, after processing, refunds and affiliates, exceed payouts and running costs month after month. The deciding variables are the pass rate, how many funded traders reach a payout and how big those payouts are. This calculator shows where your own model sits.
What share of sales do prop firms pay out?
It varies widely by firm and model, and we do not publish an average because no reliable public figure exists. The payout ratio in this tool, payouts divided by net fee revenue, is the number to watch. Above roughly the share left after your fixed costs, every extra funded trader costs you money.
Why are big accounts riskier for the firm?
Payouts scale with account size while the challenge price does not scale at the same rate. A large account sold for a few hundred dollars can produce a payout many times its price, so a few passes on big accounts can outweigh hundreds of small sales. Change the account size input to see the effect.
Does this model a revenue-share white-label?
Not directly. It models a firm that funds its own payouts. On a revenue-share white-label the partner usually funds payouts and takes a share of revenue, which protects you in a bad month and costs you in a good one. Use the launch cost calculator to compare technology paths.
Where do the default pass rates come from?
They are assumptions, labelled as such, chosen to make the default example readable. They are not industry averages. Firms that publish pass or payout rates use different products and definitions, so the only reliable input is your own data or your platform provider's reporting.
Is this financial advice?
No. The projections are hypothetical and depend entirely on the inputs shown. They are a planning aid for founders and operators, not a forecast, and they say nothing about any trader's chance of passing an evaluation or receiving a payout. Speak to an accountant before you commit capital.
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