As a seasoned options trader, you’ve decided it’s time to up your game by joining a proprietary trading firm. The appeal is evident: prop trading firms provide the capital to fund your trades, potentially giving you access to significantly more capital than you currently have. In exchange, they take a portion of your profits, making it a potentially lucrative stepping-stone in your trading journey.
The Hurdle: Prop Trading Firms and Options Trading
However, your research might have hit a bit of a snag. Many of the well-known prop trading firms, such as FTMO, Surgetraders, TopStep, and Fidelcrest, appear to concentrate mainly on futures, forex, and equities trading.
Despite your demonstrated expertise and success in options trading, it seems this area doesn’t feature prominently in their offerings. You may be left wondering, why is this so?
Why Not Allow Options Trading?
First, let’s understand what options trading entails. As you know, options are derivative instruments that offer the potential for high returns due to their leveraged nature.
However, they also carry significant risk and require a solid understanding of the market, volatility, and time decay to be traded effectively. They are also complex instruments with many different strategies and risk/reward profiles.
Now, let’s look at why most funded trader programs do not allow options trading:
- Risk Management: Prop firms use their own capital to fund traders and therefore have stringent risk management practices. Due to the higher risk and potential for significant losses associated with options trading, prop firms may avoid these instruments to protect their capital.
- Lack of Standardization in Options Trading Strategies: While the basics of options are standardized, the strategies that can be used with options are not. There are a wide variety of options strategies, each with their own risk and reward profiles. This lack of standardization can make it difficult for a prop firm to effectively monitor and manage risk.
- Complexity: Trading options requires a deep understanding of a range of factors, including the Greeks (delta, theta, vega, and rho), implied volatility, and how these elements interact with each other. While you may have mastered these complexities, from the prop firm’s perspective, not all traders have the necessary knowledge to handle these intricacies effectively, which can result in amplified risk.
- Scale and Liquidity: Prop firms often need to manage large amounts of capital, and thus, they typically choose markets that offer high liquidity and the ability to scale positions easily. Options, especially those written on less liquid underlying assets or with near expiry dates, may not offer the same level of liquidity.
- Regulatory Hurdles: Offering options trading could mean dealing with additional regulatory and compliance requirements. This is an added complexity that many prop firms might choose to avoid.
However, this is not to say that opportunities do not exist. Some traditional prop trading firms do allow options trading, though their business model differs. These firms may require you to contribute a portion of your own capital and undergo a rigorous vetting process. Continue reading to see these firms highlighted below.
Trading with Leverage
While options trading and leveraged trading via a prop firm are different, both allow traders to control a larger position with a smaller amount of capital.
Understanding the Basics
In options trading, you pay a premium to control a certain amount of an underlying asset until the option expires. The leverage here comes from the ability to potentially profit from a large quantity of the underlying asset while only investing a fraction of its actual value.
On the other hand, in prop trading with leverage, the firm allows you to trade with more capital than you’ve deposited. Here, the leverage refers to using borrowed money to increase potential returns.
Options Traders and Leverage
Traders who have been successful in options trading might find they can also be successful in leveraged trading through a prop firm. Many of the skills required are the same: understanding market trends, managing risk effectively, and making educated decisions about entry and exit points.
If you, as an options trader, are considering making the transition, it’s crucial to understand that while the potential for increased profits is there, so is the risk. Trading with leverage means that you can lose more than your initial deposit if a trade goes against you.
Strategies and Learning Curve
It’s also worth noting that the range of strategies available in leveraged trading might be different from options trading. While options strategies can be built around volatility, time decay, and other factors, leveraged trading is usually more straightforwardly focused on the underlying asset’s price movement.
Lastly, though there’s a learning curve when transitioning from options trading to leveraged trading, many prop firms offer educational resources, mentoring, and a trading community, which can all aid in your journey.
Breaking Down Prop Trading Firms
First off, what exactly are options prop trading firms? Put simply, these are firms that provide skilled traders with access to funding for some form of flat fee and/or small share in your profits.
Here are some important aspects of the best prop trading firms to consider:
- Trading platform – Some options prop trading firms allow you to trade directly on their platform or through an integration with a number of brokers, while others don’t have such support. It’s a good idea to ensure your prop firm of choice has the trading capabilities you prefer.
- Minimum deposits – The whole point of prop firms is to help traders get access to tradeable funds. So, a high minimum deposit pretty much defeats the purpose. If you are hoping to get started without breaking the bank, be sure to consider any minimum deposit requirements.
- Trading capital – Some options prop trading firms will provide you with $10,000, while others may fund traders all the way up to $1 million or more. Depending on your comfort level with managing large sums, you may prefer certain options prop trading firms over others.
- Educational resources – Many options prop trading firms provide comprehensive educational platforms, including forums and even ebooks nad webinars. Others, however, may offer little to no educational resources. If you’re more of a beginner or intermediate trader, it might be a good idea to pick a platform that helps you learn.
- Profit targets – Most prop firms require you to meet a given profit goal in a given timeframe. If you don’t, then you can’t secure funding. It’s a good idea to aim for a reasonable profit target through many small wins, rather than shooting for the moon on every trade.
- Daily loss limits – When using an options prop firm, make sure to track your loss limits. If you don’t follow them properly, you can lose your funding.
What to look for in options prop trading firms
In addition to the above features, here are a few more aspects to consider when it comes to choosing the right prop trading firm for you(or options prop firm):
- Track record – You can rest easy with some options prop trading firms as they have excellent ratings on sites such as TrustPilot. This can give you some measure of confidence in their track record.
- Withdrawal policies – You want access to your trading profits, right? Yeah, that’s what we figured. Different funded accounts have different policies in terms of withdrawal, so make sure you understand the policy before signing up.
- Support – Is there a live chat option for quick help? Is there email only? Can you call and speak with a human being? Depending on your preferences, it’s a good idea to see what level of customer support they have.
- Fees – When it comes to fees for prop firms, you should be keeping most of the profits, as in 80-90+%. Ideally, the monthly fee and any other fees will be low as well.
Top Options Prop Trading Firms
Maverick Trading has carved a niche for itself as one of the premier proprietary trading firms, emphasizing education and risk management. Recognized for its advanced training programs, Maverick focuses on ensuring that its traders are well-equipped with the knowledge and tools necessary to navigate the complexities of the financial markets.
For those aspiring to break into the prop trading world, Maverick presents an enticing offer. They have a structured training and mentoring program, which covers everything from basic trading concepts to advanced strategies, ensuring traders have a comprehensive understanding of the markets.
Maverick offers opportunities in options and equities trading, and its unique risk management model ensures that traders operate within defined parameters, minimizing potential losses.
To get started with Maverick, one needs to undergo their comprehensive evaluation process. This assessment is aimed at understanding a trader’s skill level, commitment, and potential to succeed in the fast-paced world of proprietary trading.
Their ethos is built on cultivating a community of traders who are not only successful but also operate with integrity and transparency. Those who make it through Maverick’s rigorous evaluation process find themselves in an environment that fosters growth, camaraderie, and continuous learning.
TradeFundrr stands out in the proprietary trading landscape with its innovative approach to capital allocation and trader development. Unlike traditional prop firms that rely heavily on trader evaluations and stringent recruitment processes, TradeFundrr prides itself on its open-door policy, welcoming traders of all experience levels.
Their model is built on trust and empowerment. By providing traders with access to substantial firm capital from the outset, they instill a sense of responsibility and commitment. This approach has proven to be beneficial, as many of their traders often outperform their counterparts in more traditional settings.
TradeFundrr offers a plethora of trading opportunities, from equities to forex, ensuring that traders have a diversified portfolio. Their state-of-the-art trading platform, combined with access to global markets, ensures that traders are always at the forefront of market trends.
Training and mentorship are at the core of TradeFundrr’s philosophy. They believe that continuous learning is the key to consistent profitability in the markets.
Their in-house team of experienced traders and analysts regularly conducts webinars, workshops, and one-on-one sessions to ensure that every trader, regardless of their experience level, has the resources to succeed.
In a nutshell, TradeFundrr’s unique blend of trust-based capital allocation, diverse trading opportunities, and an unwavering commitment to trader development makes it a top choice for both budding and experienced traders.
T3 Trading Group
T3 Trading Group prides itself on creating elite solutions for the active trading community. The firm provides professional traders with access to firm capital for superior leverage, great locates for short selling, a community of seasoned professionals, and competitive trading cost and payout structures.
Traders can trade multiple asset classes including equities and options, with automated trading options also available.
To become a trader with T3 Trading Group, one must first understand what proprietary trading is. Proprietary trading involves accessing a firm’s capital to make trades.
You do not need a college degree to become a proprietary trader, but self-motivated education through books, courses, and daily market observation is essential.
Unlike many others in this list, there is not a straightforward evaluation program for becoming a funded trader with T3 Trading Group. For starters traders at T3 are required to pass the SIE and Series 57 Exams. Studying for these exams should not be put off, as passing them is largely dependent on the work you put in.
If you attempt to join T3 Trading, you should prepare for a trader interview. The firm will want to know why you’re interested in prop trading, why you think you’ll succeed, and about you as a person. After joining, T3 provides support and mentorship to new traders to help them get acclimated to the industry, offering one-on-one conversations and group discussions.
It should be noted that when compared to other prop firms across the industry, T3 Trading has high startup costs. They require traders to bring money to the table as well – a minimum risk capital contribution of $7500.
While T3’s process to become a trader is more expensive, rigorous, and may not have a simple evaluation period like other firms, it does offer a comprehensive and supportive environment that prepares traders for the reality of the markets.
SMB Capital stands out from many other proprietary trading firms for two main reasons. On the plus side, it is on a shorter list of prop firms that actually offer options trading. The other reason is due to its highly selective recruitment process.
While some proprietary trading firms (like those listed below) have established evaluation programs and onboard thousands of traders globally, SMB Capital takes a distinctly different approach.
In contrast to firms that cast a wide net, SMB Capital adopts a more targeted strategy in its recruitment process. It receives thousands of applications but offers only a handful of seats on its trading desk.
This rigorous selection process ensures that only the most promising candidates, who display a strong commitment to mastering the craft of trading, are accepted. The aim is not merely to expand in numbers but to cultivate a team of high-performing traders who contribute significantly to the firm’s overall performance.
Furthermore, SMB Capital’s unique approach to trader development further distinguishes it from other firms. It provides an environment that nurtures traders from beginners to consistent profit-makers, and eventually to seven-figure earners.
This focus on continual growth and improvement, combined with a culture of recognition for exceptional trading performance, creates a motivating and supportive environment for traders to thrive.
With that said, SMB’s profit split of 20% trader vs 80% company is not very competitive in the prop trading market. In addition to the unfavorable profit split margin, SMB also has high desk fees – something to keep in mind before choosing the prop firm you choose to sign up with.
This model emphasizes quality over quantity, focusing on nurturing a smaller group of highly skilled and successful traders rather than merely expanding its roster of traders.
Other Top Prop Trading Firms
TopStepTrader offers funded accounts to options traders all around the world. Many traders are finding success with TopStep, as more than $2 million in profits was withdrawn in 2020.
While some prop firms don’t have strong track records, TopStepTrader has a 4.5/5 rating on Trustpilot (1,500+ reviews), so you can rest assured this is a legitimate service.
To use prop firms such as TopStepTrader, you’ll have to go prove your ability to earn consistent profits as a day trader. So, depending on your ability level, you may need to educate yourself and learn effective trading strategies first.
Click here and check out TopStepTrader for yourself and start a 14-day free trial. Save 20% off your purchase via our exclusive link.
SurgeTrader is our next options prop trading firm, and it has simple rules and a streamlined process for funded options trading. Compared to some of its competitors, which require more complicated trials, SurgeTrader offers a simple, one-step process. Plus, it permits nearly any type of trading activity, including forex and many other assets.
The SurgeTrader platform provides a profit split of up to 90% and there’s also no minimum trading days requirement, which is helpful for traders who can’t commit to trading each and every day.
SurgeTrader keeps things simple across the board, with a 4% daily loss limit, 5% maximum drawdown, and 10% profit target, no matter your account level. This makes it a breeze to use.
To explore SurgeTrader for yourself, click here so you can see if it might be right for you. You can get 10% off by using coupon code modestmoney on SurgeTrader.
Next up is FTMO, a well-known prop firm that provides funded trading accounts to eligible traders. The process to gain eligibility involves two parts.
To get your funded account, you must first pass the FTMO Challenge. It works by asking you to prove your trading abilities with a simulated account. You then move onto a live account in order to pass the Verification phase.
One excellent feature of FTMO is its emphasis on trading the news, which can be huge for options traders. “Trading the news” is helpful when aiming to profit off short-term market movements and volatility, and FTMO helps its traders embrace this strategy.
Finally, FTMO boasts a strong track record, with repeated placement among Deloitte’s Technology Fast 50. If you want to explore FTMO’s offerings and take advantage of a free trial, simply click here.
OneUp Trader is a fast-growing provider of funded accounts, with accounts ranging from $25,000 to $250,000.
While many funded account providers require a two-part or three-part process, OneUp Trader has a simple one-step process. This allows eligible traders to get started quickly. Once you start trading, you must trade at least fifteen days to meet your profit target. After that, you’ll get placed with one of their funding partners.
Some benefits of OneUp Trader are its advanced analytics, its support for various trading platforms, and its lack of data fees (which are fairly common with prop firms).
While many prop firms don’t have a great track record, that’s not the case with OneUp Trader. Currently the owner of a 4.7/5 score on TrustPilot, OneUp Trader is a legitimate service.
To check out OneUp Trader for yourself, simply click here so you can learn more and start your free trial. You can get 20% off your purchase by using coupon code 6L3NAPO on OneUp Trader.
Fidelcrest is another options prop trading firm that allows traders to access a huge variety of assets, including stocks, indices, commodities, and forex.
To get into Fidelcrest’s Pro Trader Program, you must show your trading skills by completing a two-step process. First, there’s the Fidelcrest Trading Challenge, which is a 30-day trial period. After that, you move on to the Verification phase, which is similar but requires 60 days.
Another great aspect of Fidelcrest is flexibility. Traders can also start off with the Micro Trader Program. This allows newer traders to test their skills before taking on a larger account. These accounts span from $10,000 to $50,000, while the Pro Trader accounts span from $150,000 all the way up to $1 million.
Click here to explore Fidelcrest and begin their Trading Challenge at your convenience. Get 15% discount on Fidelcrest when you use coupon code MM-15
City Traders Imperium
City Traders Imperium is another top prop firm when it comes to funded options trading. While many prop firms play into the idea of getting rich quickly to entice new traders, City Traders Imperium offers robust educational resources and is straightforward about what to expect.
The first step to trading with City Traders Imperium is to go through one of its evaluation programs, like the Day Trading Challenge (for forex, indices, and commodities). Or, you can pay a larger sum to receive direct funding immediately. This may be a good option for experienced traders who have more capital and have faith in their ability to earn profits immediately.
Another way that City Traders Imperium stands out is through their free consultation call. This call provides traders with access to a professional who will study your trading approach and psychology to see how you can improve on your profitability.
Click here to discover City Traders Imperium and become a funded trader through one of their evaluation plans or by opting for direct funding. Get 10% off when you use coupon code CTI10% on City Traders Imperium.
Best suited for professional traders with a good understanding of risk management, Earn2Trade offers two paths to funding (both can technically be completed in as little as 15 days!).
Founded in 2016 and currently boasting a score of 4.8/5 on Trustpilot, Earn2Trade provides traders with a streamlined path to funded options trading.
Click here to learn about the differences between the two funding paths! Get 20% discount on Earn2Trade when you use coupon code modestmoney
FundedNext is a reliable proprietary trading firm that offers a variety of funding options and evaluation plans, catering to different levels of experience and trading styles. Starting capital for FundedNext Evaluation Traders ranges from $15k to $100k, and may be increased for traders consistent in their strategy and risk management.
One of the key features of FundedNext is its instant account creation. Once you sign up, you can start trading with no risks on the first day. There are no restrictions on trading strategies, making it a flexible choice for traders who engage in day trading, scalping, and even holding trades over the weekend.
It’s important to note that while weekend trading is not allowed in the Express model, the Evaluation model does permit traders to hold over the weekend.
FundedNext offers a 15% profit share during the assessment phase. This profit share can be withdrawn in the Express model, but not in the Evaluation model until the first payout is made from the funded account. The company is also known for its active customer support and the personal account managers assigned to each trader
FundedNext has an impressive presence on various review sites. On Trustpilot, it holds an “Excellent” rating with a score of 4.6 out of 5.0 from nearly 4000 reviews, reflecting its commitment to customer satisfaction and service quality.
The company has a proactive approach to addressing negative feedback, responding to 91% of negative reviews, usually within a week.
Click here to explore their site and learn more about becoming a funded trader with FundedNext. You will get 5% off when you use coupon code modestmoney on FundedNext.
Audacity Capital, a well-known proprietary forex trading firm, offers two distinct routes for traders to gain access to a funded trading account: The Ability Challenge and the Funded Trader Program. These options offer flexibility to traders, allowing them to choose the path that best aligns with their trading style and confidence.
The Ability Challenge is designed for traders who want to demonstrate their trading proficiency. For a refundable fee of $129, traders engage in a two-stage process encompassing a Challenge and Verification phase. Successful completion of these stages results in the trader receiving a live account, where they enjoy a profit split of 75/25.
Alternatively, the Funded Trader Program is tailored for seasoned traders prepared to immediately engage in live trading. This program, which requires a $299 enrollment fee and a $99 monthly fee, offers a 50/50 profit split. A notable feature of this program is the rapid scaling capability, enabling traders to double their account with every 10% profit earned.
One of the standout features of Audacity Capital is its compatibility with MetaTrader 4, facilitating swift trades and narrow spreads, which are crucial for forex traders. Moreover, the firm has a solid reputation, underscored by almost 1,000 reviews on Trustpilot and an impressive rating of 4.7/5.
For those considering a proprietary trading firm that offers a strong track record and flexible options, Audacity Capital is a compelling choice. For more detailed information about their offerings and to determine if it aligns with your needs, you can visit their website by clicking here.
The Funded Trader
The Funded Trader is a well-regarded online prop trading firm, offering traders the opportunity to trade with a funded account up to $600k and potential to scale up to $1.5 million. With a 4.7/5 rating on Trustpilot, The Funded Trader has a solid track record in the prop trading field.
The platform stands out for its flexibility in obtaining a funded account and its payout options. The Funded Trader provides four unique challenges – The Standard Challenge, The Rapid Challenge, The Royal Challenge, and The Knight Challenge, each with distinct drawdowns, profit targets, and time frames for payouts.
Moreover, the platform offers various payout methods, with a default 80/20 payout and the potential for a 90/10 split. It also maintains a rapidly growing community of traders on Discord, providing an environment for idea exchange.
Its unique, game-like website design, while unconventional, offers a refreshing and engaging experience for users, setting it apart in the landscape of prop trading firms. Although its integrated brokers may not have widespread recognition, they effectively support the firm’s trading operations.
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Top Options Prop Trading Firms – Final Thoughts
Choosing a suitable proprietary trading firm as an options trader can be a tasking process due to the peculiarities of options trading and the relative scarcity of prop firms that cater specifically to this niche. However, with the right research, it is possible to find a firm that aligns with your trading style, risk tolerance, and goals.
While the pickings may seem slim in the world of options trading-focused prop firms, you shouldn’t discount the benefits of joining a more generalized prop firm that, while not specializing in options, could provide you with numerous advantages (highest paying prop trading firms).
These firms may offer more extensive funding, a broader trading community, comprehensive educational resources, and rigorous evaluation programs, all of which can help you refine your trading strategies and elevate your trading acumen.
- Broadening your skillset: By choosing to work with a prop firm that trades in different instruments such as futures, forex, and equities, you open yourself to the opportunity of learning new trading strategies, thereby broadening your skillset. This diversification could potentially be beneficial in mitigating risk and maximizing your earnings.
- Funding: While some prop firms that focus on options trading may offer a decent amount of funding, it is often the case that firms focusing on futures, forex, and equities offer more extensive funding options. This increased access to capital could exponentially increase your earning potential.
- Education: General prop firms often have a wide range of educational resources. By joining such a firm, you can learn from a diverse group of seasoned traders and gain insights into different markets. This knowledge can be instrumental in making more informed trading decisions.
- Evaluation: One of the key aspects of prop trading firms is their evaluation process. Prop firms usually have specific evaluation programs in place that traders need to pass to become funded traders. While these evaluations can be challenging, they can also provide valuable feedback on your trading strategies and help you identify areas for improvement.
While there may not be a plethora of prop firms specializing in options trading, this doesn’t mean there are no opportunities available to you. By considering firms that deal in different financial instruments, you could diversify your trading strategies, access more funding, benefit from a wealth of educational resources, and potentially unlock greater earning potential.
Always remember that successful trading is not just about picking the right instruments but also about continuous learning, prudent risk management, and adaptability in a dynamic market.
Choosing the Best Options Prop Trading Firms
The best options prop trading firms will have a reasonable onboarding process and allow traders to keep at least 80-90% of the profits. Fortunately, as shown above, there are many reputable companies that you can trade with. Ultimately, the best options prop trading firm for you will depend on your specific trading goals and preferences