Profit Split

What is Profit Split in Trading?

A profit split is the way profits are shared between a trader and a company or platform that provides the trading capital. This is very common in prop firms (short for proprietary trading firms).

In simple terms, a trader uses the firm’s money to trade, and when they make profits, those profits are divided based on a pre-agreed percentage. The trader keeps a share, and the firm keeps the rest.

Example of Profit Split in Trading

Suppose a prop firm gives you capital to trade. You buy 1 Lot EURUSD at 1.10201 and later sell it at 1.10401, making a profit of 2000 Dollars.

• If the prop trading profit split is 80/20, you keep 80% (1600 Dollars), and the firm gets 20% (400 Dollars).
• If the trading profit split is 70/30, you keep 70% (1400 Dollars), and the firm receives 30% (600 Dollars).

This is how a profit split in trading works in practice.

Why Profit Split is Important

• Fair Sharing: Traders can keep a large percentage of profits while using the firm’s money.
• Low Risk for Traders: Since the capital belongs to the prop firm, traders do not risk their own large amounts of money.
• Motivation: Clear profit sharing encourages traders to perform better.