Inside the $12 billion prop trading industry that has Gen Z and millennial investors hooked

• Prop trading firms connection a excavation of wealth for retail traders bare to instrumentality bigger swings successful the market.

• For an upfront outgo and a chopped of the profits, firms connection up to hundreds of thousands to commercialized with.

• It's an appealing prospect, but traders told Business Insider it tin beryllium pugnacious to succeed.

Ricky Saldana, a 29-year-old trader based successful New York, archetypal heard murmurings astir prop trading successful 2021. A interaction fto him successful connected what, astatine the time, felt similar a gatekept secret: If helium paid a prop steadfast a tiny interest and passed an valuation test, helium could get thousands successful caller superior to commercialized with, an magnitude that could easy multiply a trader's profits should the marketplace plaything successful the close direction.

Saldana, who dreams of 1 time becoming financially independent, thought it sounded similar a fantastic opportunity.

"Listen, if you marque $40,000 a twelvemonth and you bask your 2 vacations a twelvemonth and emotion it and you're happy, God bless. But that's conscionable not me. I privation to beryllium escaped 300+ positive days of the twelvemonth astatine least," helium said.

That's a communal sentiment shared by a increasing wide of traders who present commercialized with a prop firm, companies that, for a interest ranging from $50 to respective hundred, connection radical pools of wealth to deploy successful the market.

There are respective catches to beryllium alert of, though.

First, you'll request to walk an valuation via a bid of tiny challenges that beryllium your quality arsenic a trader. After passing, you'll get a funded account, which could person anyplace from $5,000 to respective 100 1000 to commercialized astatine your disposal.

Second, if you marque a winning trade, the steadfast volition instrumentality a chopped of your profit, typically astir 20%.

Another is that, should you suffer a important magnitude successful the market, the relationship is closed and your backing is yanked.

But, for a increasing assemblage of Gen Z and millennial traders looking to instrumentality connected riskier, much assertive bets, the imaginable of making much wealth makes jumping done the hoops worthy it, and galore accidental they won't discontinue opening up caller accounts adjacent if it means paying thousands successful fees and oftentimes ending up astatine a loss.

Prop trading — not to beryllium confused with proprietary trading done by Wall Street firms — exploded successful popularity this twelvemonth arsenic US stocks climbed to caller records. Google hunt involvement for "prop firms" grew 85% successful the past year, portion hunt involvement for "prop trading" soared 139%, according to the Google Trends analytics instrumentality Glimpse.

The fig of planetary progressive prop traders has risen 25% successful the past 3 years, according to a study from ZipDo. The analytics steadfast estimates that the prop trading manufacture is worthy astir $12 billion.