Prop trading is the side hustle most retail investors haven't heard of

Retail investing has become more accessible than ever.

Commission-free brokerages, crypto exchanges, and social trading platforms have made it possible for almost anyone to participate in financial markets with just a smartphone and a modest amount of capital.

But as retail investing has gone mainstream, another corner of the industry has been growing: proprietary, or "prop," trading.

Prop trading is finding a wide audience by giving retail traders access to funded accounts, without requiring them to risk significant amounts of their own money.

It’s an industry experiencing rapid growth, as it's estimated to be valued at $7.14 billion this year, and grow at 10.9% every year until 2035. 

The concept is that rather than depositing tens of thousands of dollars into a personal trading account, aspiring traders first complete an evaluation in a simulated environment.

They must meet profit targets while following strict risk management rules, and those who demonstrate proficient trading skills then qualify to trade with the firm's capital and get to keep a portion of the profit.

For traders who have confidence in their strategy but lack the capital to scale it, the model allows traders to trade with larger amounts of capital than they otherwise could with their own accounts.

The industry has expanded rapidly over the past few years, particularly alongside the growth of crypto trading.

Today, dozens of prop firms operate globally, collectively processing billions of dollars in trading volume across forex, equities, commodities, and digital assets.

As crypto markets continue to attract active traders looking for volatility and around-the-clock opportunities, funded trading programs have become an increasingly appealing way to participate without committing large amounts of personal capital.

At the same time, the sector has drawn criticism over how some firms structure their business models.

Many traditional prop firms require traders to pay substantial evaluation fees upfront, some reaching over $1000 depending on account size.

If users do not pass their simulation, the users don’t recoup the fee and their encounter with prop trading is pure loss.

Because only a fraction of participants pass these assessments, many argue that firms can become overly dependent on simulation fees rather than successfully identifying and funding talented traders.

Transparency and incentive alignment have now come to the forefront of the industry's evolution.

A new generation of firms is attempting to address those concerns by lowering the financial barrier to entry.

LEVERAGED, for example, has introduced a "pay after you pass" model through its Turbo Trade program. Instead of paying the full evaluation fee upfront, traders can begin for just $8.88 and only pay the remaining fee after successfully completing the evaluation.

The company says this approach reduces the financial risk traditionally associated with funded trading challenges while making professional trading opportunities accessible to a broader audience.

LEVERAGED has also sought to differentiate itself beyond its funding model.

It demonstrates that it truly is pushing a new wave of prop trading forward, as it offers daily live webinars, structured trading courses, one-on-one coaching, market analysis, and its proprietary AI-powered trading assistant, ClayAI, giving traders access to educational resources and trading tools that have traditionally been reserved for professionals.

The numbers speak for themself, because the firm has supported over 50,000 portfolio managers and processed more than $100 billion in trading volume.

As retail finance continues to evolve, prop trading is emerging as one of its fastest-growing (and least understood) segments.

Prospective traders should carefully evaluate any firm's business model and understand the risks involved, but the industry's direction is becoming clear: success is increasingly measured not by how many people pay to take an evaluation, but by how many traders can ultimately be funded and supported over the long term.

Firms that reduce financial friction and invest in education and trader success will be best positioned to define the next chapter of retail trading.