The 4 Best Broker Backed Prop Firm Space: What You Need to Know

A number of brokers have ventured into the proprietary trading (prop firm) space. While brokers are the middlemen facilitating trades between retail traders and the markets, prop firms allow traders to use firm capital to trade without risking their own money.

But why are these brokers launching their own prop firms, and how do they compare to traditional prop firms? Let’s dive in and explore why brokers are stepping into this space, what benefits they offer, and whether they’re worth considering for traders.

What are the best Broker Backed Prop Firms?

I have tested several broker-backed prop firms to uncover which ones truly stand out in terms of support, funding, and overall trading experience. In this article, I will share my insights on the best broker-backed prop firms, highlighting their unique features, funding structures, and the advantages they offer to traders looking to maximize their potential.

ThinkCapital

Pros of ThinkCapital:

• Financial backing: Since ThinkCapital is a well-established broker, they have strong financial support. This ensures traders don’t need to worry about liquidity issues when it comes to payouts.
• Infrastructure: The firm benefits from its established brokerage infrastructure, including excellent customer support and trading platforms.
• TradingView: You can execture trades directly from your TradingView charts for a smoother, faster trading experience.
• Drawdown Type: While other Prop Frims focus on equity-based drawdowns, ThinkCapital uses a balance-based drawdown rule, which may make it easier to pass the challenge.

Cons of ThinkCapital:

• Growing Reputation: While Think Capital is a trusted broker, their reputation in the prop firm space is still growing. Although there are no concrete signs pointing to delayed payouts and the like, many traders are waiting to see how they handle prop firm challenges and payouts in the long run.

3 different Accounts at ThinkCapital:

1. Lightning Challenge: One-Phase Evaluation with higher cost but the fastes way to get funded
2. Dual Step Challenge: Two-Phase Evaluation with customizeable Features
3. Nexus Challenge: Three-Phase Evaluation with low entry cost and high reward potential

Key Features of ThinkCapital:

• Manage up to $300k
• Profit sharing up to 90%
• Payout frequency is 14 days
• Scale your inital account up to $1 Million
• US Customers are allowed

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Blueberry.Funded

Pros of Blueberry.Funded:

• Strong customer service: Blueberry Markets has a reputation for taking care of its clients, with responsive and helpful support teams.
• Established platform: As a broker, they offer a reliable and intuitive trading platform, which translates well into their prop firm operations.
• Ultra-low Fees: Blueberry.Funded offers a spread of just 0.01 on the mair paris and commission-free trading on indices and cryptocurrencies.

Cons of Blueberry.Funded:

• Still new to the space: As a newer player in the prop firm world, they don’t yet have the track record that other prop firms or even other broker-backed firms have. This leaves some uncertainty about the long-term reliability of their prop services.

3 different Accounts at Blueberry.Funded:

1. 1 Step: One-Phase Evaluation with higher cost and no time limit
2. 2 Step: Standard Two-Phase Evaluation
3. Rapid Challenge: One-Phase Evaluation with low cost of entry but 7-day time limit

Key Features of Blueberry-Funded:

• Max Allocation is $400k
• Profit Share: 80%
• Payout frequency is 14 days
• Scale your account up to $2 Million per Trader
  

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OANDA

Pros of OANDA:

• Global presence: OANDA’s global operations mean they have a large customer base and a wealth of experience handling traders from all over the world.
• Financial stability: As one of the bigger players, OANDA can provide stability that smaller firms cannot. Their resources mean there’s very little risk of financial trouble when it comes to paying out successful traders.
• Highest Challenge Allocation: The OANDA Black Challenge offers a virtual funding level of $500,000, making it the highest among broker-backed prop firms.

Cons of OANDA:

• Corporate feel: While some traders appreciate the professionalism of a large corporation, others may find the customer service less personal compared to smaller firms.
• Higher fees: Due to their size and reputation, the cost of entry for OANDA’s prop firm may be higher than smaller competitors.

3 different Accounts at OANDA:

1. Standard Challenges: Two-phase evaluation with standard rules (8%/5% upside target and 5% daily downside and 10% maximum drawdown) from $10,000 to $250,000.
2. Lucky 888 Challenge: Standard Challenge with $188,888 in virtual funding, an $888 fee, and an 88% share of the profits.
3. Black Challenge: 500,000 virtual funding with standard rules and 80% profit share.

Key Features of OANDA:

• Max Allocation is $500k
• Profit Share up to 90%
• Fee refund on first payout
• Access all Assets: FX, commodities, precious metals and indices
  

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IC Funded (IC Markets)

Pros of IC Funded:

• Low spreads and great execution: As a leading broker, IC Markets offers low spreads and excellent trade execution, which are carried over to their prop firm services.
• Established reputation: IC Markets has built trust within the industry for its brokerage services, and that reputation gives IC Funded an edge when it comes to credibility.

Cons of IC Funded:

• Uncertain long-term performance: Similar to other broker-backed prop firms, IC Funded is still relatively new, so traders should be cautious until the firm has more experience in the prop firm space.

One Kind of Evaluation at IC Funded:

• Two-phase evalution: Phase 1 = 10% and Phase 2 = 5% profit target
• Unlimited Trading Days
• 5% Max daily Loss
• 10% Maximum Drawdown
• Leverage: 50/1 on FX/Gold; 10:1 on indices and other commodities; 5:1 on equities
• Profit split up to 80%

Key Features of IC Funded:

• Most recognized brand
• Standard product without bells and whistles
• Lower cost per challenge compared to other trusted brands

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Pros and Cons of Broker-Backed Prop Firms

With brokers now venturing into the prop firm business, traders have more options than ever. However, there are both advantages and disadvantages to choosing a broker-backed prop firm over a traditional one.

Pros of Broker-Backed Prop Firms:

1. Financial stability: Brokers tend to have larger financial backing, which often means higher liquidity and greater security for traders.
2. Established infrastructure: Brokers already have the systems in place for customer service, trade execution, and compliance, which can translate into a smoother experience for traders.
3. Better support and resources: Since many brokers are larger corporations, they may offer better customer service and more resources than standalone prop firms.
4. Manage your personal trading account: With broker-backed prop firms, it is also possible to manage your own personal trading account. Most of them also offer to send the money you trade in the prop firm’s account directly to your personal trading account, reducing friction and waiting times.

Cons of Broker-Backed Prop Firms:

1. Potential conflicts of interest: Since brokers make money from client trading volume, there could be a conflict of interest in their prop firm models, especially if the broker profits from both prop firm fees and spreads.
2. Less specialized: Traditional prop firms focus solely on proprietary trading, meaning they may have more trader-friendly rules, whereas brokers might prioritize brokerage business over their prop firm model.
3. Corporate culture: Some traders may find broker-backed prop firms to be too corporate or less personalized compared to smaller, trader-focused prop firms.

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Why Are Brokers Launching Prop Firms?

Brokers entering the prop firm space is a notable trend. One of the key reasons is that brokers already have large infrastructures, liquidity providers, and compliance systems in place. This gives them a unique advantage over standalone prop firms. Additionally, brokers benefit from the extra stream of revenue, as prop firms charge traders for evaluation challenges and profit splits.

However, this doesn’t automatically mean broker-backed prop firms are the best choice for traders. Let’s review some of the most prominent broker-backed prop firms and discuss the potential benefits and drawbacks.

Conclusion: What Should Traders Consider?

In conclusion, the emergence of broker-backed prop firms is a trend that provides traders with new opportunities. While the financial stability and infrastructure offered by brokers like Think Capital, Blueberry Markets, OANDA, and IC Markets are attractive, these firms are still new to the prop firm space. Traders should carefully evaluate each firm’s terms, pricing, profit splits, and overall reputation before committing.

To sum it all up: Broker Backed Prop Firms are the less risky place for traders, but they are more expensive. In the end, it is up to you to decide if the 30% to 50% premium is worth the perceived stability or not. For me, since I like to spread the risk by not trading with one prop firm, it is not worth it, but if you are new to prop trading, it is probably a good choice to start with a broker-backed prop firm.