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Definition of a prop firm

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Technically, any "prop trading" or "proprietary trading" is trading a firm's money, as opposed to trading the money of investors, depositors, or partners. It may or may not have some sort of profit splitting, but that doesn't matter. Banks or other financial institutions may have prop trading desks or departments which trades the firm's own money, as opposed to the money of others.

So if you go to some prop firm like SMB where you pay to be trained then are given an account of their money to trade, it is called a prop firm because you are trading the firm's money.

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