Prop Farming, Digital Farming

     Investor invests $10,000 capital requirement to acquire 10 prop firm challenges and tools necessary to manage up to $2M of a proprietary trading firm for a profit share resulting in a 50% return on investment in six months. 

     What is a proprietary trading firm? - A proprietary trading firm, often referred to as a "prop trading firm," is a financial institution that invests its own capital in the financial markets rather than on behalf of clients. The main goal of these firms is to earn profits through trading activities in various asset classes, including stocks, commodities, and currencies.

     Proprietary trading firms throughout the world seek fund managers. In this recruiting process, proprietary trading firms will present a trading test to a potential manager or managing company. The test is called a “Prop Firm Challenge”.   A prop firm challenge is the management of a fund with fake money, based on real time and real monetary values.  The challenge has certain rules of management with a profit target to achieve.  If the test taker, known as the challenger, passes the prop firm challenge by achieving the profit target, the prop firm awards an account to manage with real funds and a profit share split between the prop firm and the new fund manager.   

     The profit share split between a prop firm fund manager and the prop firm will continue until the manager breaks a loss limitation.

     $10,000 capital investment acquires 10 software licenses, tools and 10 prop firm challenges for the opportunity to manage $2M in prop firm funds.  The software is downloaded onto the meta trading platform, reads market conditions and makes trades independently.  Software has a profitable life expectancy between three to six months.  Each prop firm challenge test allows $200,000 of capital managed. 10 Challenge accounts at 200,000 dollars each will be a total of $2.5M managed if all tests are passed. At the completion of passing the challenge and being funded $250,000 per passed challenge, there will be a profit split between the investor, manager, prop firm and account nominee.  20% will go to the prop firm, 50% to the investor, 25% to manager and 5% to account holder nominee.  Profits will continue to be distributed monthly on each managed account until a loss limitation is reached.  Each license and trade account is unique and traded simultaneously.

     Profitability from investment depends on the software passing the prop firm challenge dependent on market conditions. Historical probabilities show five out of 10 software will achieve the prop firm profit target during the challenge phase resulting in an award of five $250,000 ($1.25M) managed accounts for profit share.  At a conservative expected rate of return of 1% to 2% a month, the project will revenue $12,500 to 25,000 dollars a month until software life completion. Based on historical data, and the exponential leverage of capital being used, the investor is expected to make more than 50% return on $10,000 investment during the 6-month project.  

 

 

*Note:

To further understand the project, there are additional readings upon request with the following titles: 1.) What is a Prop Firm? 2.) What is prop firm farming? 3.) Project Breakdown