Glossary
The prop firm glossary.
Plain-English definitions of the terms used in funded trading and funded sports betting — from trailing drawdown to closing line value. Trading-side vocabulary is documented unevenly across the industry; sports-side prop terms are barely documented anywhere. This page covers both, precisely.
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Funded trading
Trading terms.
The vocabulary of evaluations, drawdown mechanics, and the rules that decide who gets funded. Definitions note where firms differ, because the differences are where traders get surprised.
Prop firm (proprietary trading firm)
A company whose traders trade the firm’s capital rather than their own. In the modern retail model, a trader pays for an evaluation, proves they can follow risk rules, and receives a funded account with a profit split on gains. The model now spans forex and CFDs, futures, crypto, and sports betting.
Evaluation (challenge)
The audition phase of a funded program. The trader must reach a profit target while staying inside drawdown and consistency limits; passing earns a funded account. Evaluations are the commercial core of the model, and firms design them in a challenge builder rather than in code.
One-step, two-step, and three-step evaluations
The number of phases a trader must pass before funding. A one-step evaluation has a single profit target; two- and three-step programs add phases, usually trading a cheaper entry price against a longer road to funding. Each phase carries its own target and rules.
Funded account
The account a trader receives after passing an evaluation. Depending on the firm, “funded” can mean live capital or a simulated account whose performance the firm pays out against from its own cash. Reputable firms are explicit about which model they run.
Instant funding
A program that skips the evaluation and grants a funded account immediately for a higher upfront fee. The trade-off is usually tighter drawdown limits and a less generous starting profit split.
Profit target
The gain a trader must reach to pass a phase, defined as a share of the starting balance. Targets are configured per phase, so a multi-step program can demand more in its first phase than in its last.
Drawdown
The drop in an account from a reference point — the general concept behind every loss limit in prop trading. What the reference point is (starting balance, the day’s open, or peak equity) is exactly what distinguishes the drawdown types below.
Daily drawdown
The maximum a trader may lose in a single day before breaching. The reset time, and whether the limit is measured against balance or equity at the day’s open, materially change how strict the rule is — two firms with the “same” daily drawdown can behave very differently.
Overall drawdown
The maximum total loss allowed over the life of the account, measured from the starting balance (static) or from a moving reference (trailing). Breaching it fails the evaluation or closes the funded account.
Trailing drawdown
An overall drawdown whose floor rises as the account makes new highs, locking in a minimum equity level behind the trader. It is standard in futures prop firms, where it is often computed tick by tick against open equity. Some firms stop the trail once it reaches the starting balance; others never stop it — the difference matters enormously.
Equity-based vs. balance-based drawdown
Two ways of measuring the same limit. Balance-based drawdown counts only closed trades; equity-based drawdown includes floating profit and loss on open positions — so an open winner that retraces can breach an equity-based limit even if every closed trade was profitable.
Consistency rule
A rule that stops one outsized day or trade from carrying the whole result — typically a cap on how much of total profit may come from a single session. It filters out lottery-ticket styles that can pass an evaluation but lose money in a funded account.
Minimum trading days
The fewest distinct days a trader must trade before passing a phase or requesting a payout. The rule exists to force a sample size: one lucky session should not be sufficient evidence of skill.
Profit split
How gains on a funded account divide between trader and firm, expressed as a percentage share. Splits often improve as a trader advances through a scaling plan.
Payout
The actual transfer of a trader’s profit share. In a well-run firm, payout requests are validated against the account’s rules automatically before money moves — see payout automation under infrastructure.
Scaling plan
A schedule that grows a funded account as the trader hits milestones — a larger balance, sometimes a better split — while violations can pause or reset progress. It keeps firm exposure proportional to demonstrated skill.
Breach
Any violation of an account’s rules: exceeding a drawdown limit, trading inside a restricted news window, breaking a consistency rule. Detecting breaches in real time rather than at end of day is the job of the risk engine.
Retake (reset)
A fresh attempt at an evaluation after a failure — sometimes discounted, sometimes free when the trader broke no rules but ran out of time. Retake logic is a configurable part of challenge design, not an afterthought.
A-book / B-book
Brokerage terms describing where risk sits. An A-book operator passes trades to external liquidity providers; a B-book operator holds the other side internally. In prop trading the distinction describes whether funded activity touches live markets — most evaluation-model firms internalize it.
Copy trading
Automatically mirroring trades from one account to others. It is both a legitimate feature and an abuse vector: copy-trade rings pass evaluations across many accounts by duplicating one strategy, which is a standard fraud-detection pattern.
High-frequency trading (HFT)
Automated strategies that fire dense bursts of orders in short windows. Most prop firms restrict HFT-style activity because it tends to exploit simulated execution rather than demonstrate skill, and burst patterns are a routine risk-engine detection target.
News trading
Taking positions around scheduled economic releases — FOMC decisions, NFP, CPI prints — when spreads widen and prices gap. Many firms impose no-trade windows around these events because simulated fills during them do not resemble live-market reality.
Slippage
The difference between the price a trader expected and the price the order actually filled at. In live markets it is a cost of doing business; in simulated environments the operator chooses how to model it — which is why a firm’s slippage policy is worth reading.
Leverage cap
The maximum leverage an account may use, enforced before an order is accepted rather than discovered after. Caps vary by instrument and firm and are one of the quieter rules a risk engine applies continuously.
Weekend holding rule
A restriction on carrying positions over the weekend, when gaps can blow through drawdown limits with no exit available. In crypto prop firms, where markets never close, the weekend rule becomes a deliberate configuration decision instead of a default.
Funded sports betting
Sports betting terms.
Funded betting borrows vocabulary from sportsbooks, sharp bettors, and prop trading. PropXO provides B2B operator software and does not accept consumer wagers or hold participant funds; program classification varies by mechanics and jurisdiction.
Sports betting prop firm
The funded-account model applied to betting: bettors pass an evaluation with a profit target and staking limits, then receive a funded simulated bankroll with a profit split on performance. The sports betting prop firm page walks through the full model.
Funded bettor
A bettor who has passed an operator’s evaluation and now makes selections against a simulated bankroll under staking rules. Depending on the program terms, funded bettors may become eligible for operator-funded rewards based on performance.
Simulated bankroll
The core mechanic of funded betting: a notional balance whose picks are recorded against live market odds. PropXO provides B2B operator software and does not accept consumer wagers or hold participant funds. The classification and licensing needs of a program depend on its mechanics and jurisdictions.
Staking plan
The rules governing how much a bettor may risk: maximum stake per pick, daily exposure caps, parlay limits, allowed odds ranges. In a well-built platform these are enforced before a pick is accepted, not audited after the fact.
Unit
A bettor’s standard bet size, used to normalize results across bankrolls of different sizes. Performance quoted in units communicates skill independent of the currency amounts involved.
Stake
The amount risked on a single pick. In funded programs the maximum stake is a staking-plan rule, checked at the moment of pick acceptance rather than reviewed later.
Exposure
The total amount at risk across all open, unsettled picks. Daily exposure caps prevent a bettor from concentrating an entire bankroll into a single slate of games.
Straight bet
A single wager on a single outcome — one market, one selection, one price. The simplest bet type, and the cleanest baseline for evaluating betting skill.
Parlay
One bet combining several selections, all of which must win for the bet to pay. Parlays multiply both odds and variance, which is why funded programs typically limit how many legs a parlay may carry.
Player props
Markets based on an individual player’s recorded performance rather than the final game result. Because participation, official statistics, postponements, and corrections can affect grading, funded programs need explicit player-prop eligibility and settlement rules.
Pick’em
A daily-fantasy-adjacent contest format in which users take over/under positions on player stat lines against the house or a pool. It shares vocabulary with funded betting but runs on different mechanics — a funded program grades picks against live market odds instead.
Market
A specific proposition available to bet on: the winner of a game, the point spread, a player’s stat line. An odds feed is, at bottom, a stream of markets and prices that a settlement engine later grades.
Odds formats (decimal / American / fractional)
Different conventions for expressing the same price. Decimal odds state the total return per unit staked; American odds quote plus and minus figures around a fixed stake convention; fractional odds state profit relative to stake. Platforms serving international bettors display more than one format side by side.
Juice / vig
The margin reflected in offered prices — the reason opposite sides of a market may each return less than an even-money price. It affects the break-even rate and should be included when interpreting ROI, price quality, and program economics.
Line movement
The change in a market’s odds or spread between open and close as money and information arrive. Line-movement context matters in funded betting risk review: a pick that beat the move looks very different from one that chased it.
Steam move
A fast line move across multiple market sources. Operators may review repeated selections made around rapid moves or stale prices, but the pattern is evidence for investigation rather than an automatic conclusion about abuse or participant intent.
Closing line value (CLV)
The difference between an accepted price and a defined later reference price, often market close. CLV provides price context over a sufficiently defined sample, but it is sensitive to source, cutoff, and market mix and does not by itself prove skill.
Settlement / grading
Deciding the outcome of a bet — won, lost, or void — from official results and applying it to the bankroll. Automation can handle routine outcomes, while unresolved and edge cases move to a human review queue.
Void / push
A bet canceled with the stake returned. Voids come from postponed events or market-specific rules; a push is the spread-betting case where the result lands exactly on the line. Both settle at no profit and no loss.
Sharp / square
Informal industry labels for bettors perceived as more or less price-sensitive. They are broad stereotypes, not reliable participant classifications; operators should rely on observable records and documented rules.
Infrastructure
Infrastructure terms.
The systems underneath both models. These are the words that come up in vendor conversations — knowing them precisely makes those conversations shorter.
White label
Software one company builds and another operates under its own brand and domain. A white-label prop firm platform means traders and bettors see the operator’s name everywhere and the vendor’s nowhere — the trader experience module is what that looks like in practice.
Challenge engine
The system that defines and runs evaluations: phases, targets, drawdown types, consistency rules, fees, and retake logic — with multiple variants live at once and existing participants locked to the rules they bought. Ours is the challenge builder.
Risk engine
The system that enforces account rules in real time — drawdown, targets, restricted windows, leverage — and flags abuse patterns for human investigation. A sound design principle: alerts are signals for investigators, not automatic punishments.
Settlement engine
The system that grades outcomes and updates balances — bet results against official data in sports, rule outcomes in trading. Reliability here is what allows an operator to automate payouts with confidence.
Sports betting engine
A secondary B2B product for selected teams operating funded-betting programs. Product and implementation scope are discussed privately; see the Sports Betting Engine page to start that conversation.
KYC (Know Your Customer)
Identity verification before a participant can be funded or paid. Modern platforms automate it through providers such as Veriff and SumSub and attach the results to the customer record, so support and risk teams see verification state in context.
AML (Anti-Money-Laundering)
The policies and checks that prevent a platform from being used to move illicit funds: identity verification, payment-method consistency, and monitoring for unusual flows. In prop platforms, AML concerns concentrate around payouts.
Payout automation
Validating payout requests against account rules automatically — profit thresholds, minimum days, open violations — with configurable auto-approval for clean cases and human review for the rest. Part of the automation module.
Wallet ledger
A double-entry record of every balance change in a simulated bankroll or trading account: stakes, settlements, adjustments, payouts. A real ledger makes every balance explainable — the difference between accounting and a number in a database column.
Migration / cutover
Moving a live firm from one technology provider to another — traders, balances, in-flight challenges, history — followed by cutover, the moment traffic switches to the new platform. Done properly it is a careful engineering project measured in weeks; prop firm migration explains the phases.
Audit trail
An append-only record of who did what and when: rule changes, manual overrides, payout approvals. When a trader disputes a breach, the audit trail is the evidence.
Review queue (investigation queue)
Where automated systems hand off to humans: flagged accounts, unresolved bet grades, payout exceptions. A well-designed queue carries full context, so an investigator acts on evidence instead of reconstructing history from scratch.
Multi-accounting
One person operating many accounts — to hedge evaluations against each other, farm passes, or claim repeated discounts. Detection combines KYC duplication checks, IP and device fingerprints, and behavioral correlation across accounts.
Device / IP fingerprinting
Identifying a device or connection by its observable characteristics so the same actor can be recognized across accounts. Fingerprint conflicts are a standard input to multi-accounting investigations — a signal to investigate, never proof on its own.
FAQ
Frequently asked questions
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A live walkthrough of the platform behind these terms — configured for the vertical you want to launch. Product scope and commercial terms are discussed privately.