“Where does the payout money come from?” is the most basic question for understanding how the prop industry works. This guide breaks down the five revenue lines and the payout-pool math.
Five revenue lines
1. Evaluation fees (one-time)
Primary revenue for FX/CFD props. $19–$1,000, most common $50–$200. One payment gives the trader the evaluation window (often extendable).
Applies: FTMO, FundedNext, FundingPips, The5%ers, Alpha Capital, Audacity Capital, etc.
2. Monthly subscriptions
Primary revenue for futures props. Trader pays monthly while the evaluation is active. $25–$300/mo, most common $99–$150.
Applies: Topstep, Apex, TradeDay, MyFundedFutures, Take Profit Trader, etc.
3. Reset fees
To retry after a breach. $30–$150, typically 50–80% of the original fee. Generates additional revenue from failing traders.
4. Add-ons
Add-ons purchased on top of the evaluation. Examples: lift split 80% → 100% ($50–$150), reset right ($30–$80), looser drawdown, news trading allowed, etc. Add-ons are high-margin.
5. Lapsed-evaluation revenue share
When a trader does not pass within the evaluation window, the fee becomes pure firm revenue. With a 5–15% pass rate, 85–95% of fee revenue stays with the firm.
The payout pool math
The firm runs an internal payout pool. All fee revenue feeds it; successful-trader payouts come out of it.
Simplified model: one firm sells 1,000 evaluations per month, average fee $100, pass rate 10%, average monthly payout per successful trader $1,500.
- Monthly revenue: 1,000 × $100 = $100,000
- Monthly payout (worst case — every passed trader withdraws max every month): 100 × $1,500 = $150,000
That looks underwater. In practice:
- Not every passed trader withdraws each month (30–60% withdraw regularly on average)
- Many passed traders churn out within a few months (average 3–5 withdrawals)
- Add-ons and reset fees generate additional revenue
Factoring those in, firms at scale run a solvent payout pool. Firms below the scale threshold (under ~100 evaluation sales per month) are structurally upside-down on the payout pool.
How under-scale firms fail
New entrants with weak sales typically close via three patterns:
- Cash-flow blowup: cannot fund payouts from fee revenue, fund payouts from new fee revenue (Ponzi-shape) → regulatory action or rep damage → close
- Retroactive rule change: change live-account rules to suppress payouts → rep damage → wind down (the FundingTicks pattern)
- Quiet exit: stop the business before regulatory risk crystallizes (the Stocknet Institute pattern)
Most of the 80+ firms in the shutdown tracker fall into one of these three.
Pass rate is the binding constraint
The 5–15% pass rate is actively managed by firms. Why:
- Above 30%: payout pool goes underwater, firm fails
- Below 5%: traders stop coming, fee revenue dries up
The major mature firms (FTMO, FundedNext, FundingPips, The5%ers, Apex, Topstep) all converged on 5–15% because, across multiple market cycles, that band is the equilibrium where “the firm can keep paying” and “traders keep showing up.”
See pass rate statistics for the deep version.
Reading firm reliability from the business model
Three axes for firm selection:
- Scale: Trustpilot reviews ≥ 5,000 — enough monthly sales for the math to work
- Revenue diversification: not just one-shot fees — also subs, add-ons, resets
- Historical-number integrity: disclosed payouts match estimated revenue (scale × avg fee)
E8’s $74M+ disclosure is consistent with its scale and fee structure from 2021 onward. FundingTicks’ $220M+ is consistent with its sustained operation through late 2025.
A firm that survives on “scale × diversification × number integrity” is the lowest payout-risk choice.
This page is informational and is not investment advice.