As the prop industry matures and competition intensifies, a new question is emerging:
Is the A-book model the only path forward for firms that want to survive?

For years, most prop firms operated on a simple model — charge traders to take a challenge, and if they pass, pay them out using revenue from other challenge fees. But as challenge fees drop, marketing costs rise, and trader performance improves, this model is starting to creak.

When Profits Become Liabilities

The risk is clear:
If a funded trader hits a large payout, the firm may end up owing more than it earned from that client. With tightening margins and increasing pressure from competitors, that can quickly become unsustainable.

FTMO, the industry’s biggest name, reportedly pays out close to 50% of its revenues to traders. That works because of their massive scale and low cost base — but for smaller or newer props, even a few large payouts can throw off the balance.

Some firms try to reduce payout exposure by:

• Making challenges harder
  
  
• Delaying payouts strategically
  
  
• Clamping down on fraud (one firm claims it cut payouts to 15% of revenue this way)
  
  

But each of these has limitations — especially in a hyper-competitive environment where "easier challenges" sell.

Enter the A-Book Model

Instead of paying traders from challenge fees, several firms are now funding traders on live A-book accounts — meaning real money, real execution, and real market exposure.

In the last month alone:

• Alpha Capital launched live-funded accounts
  
  
• FunderPro and Fuze Traders have been doing this for a while
  
  
• BullRush introduced A-book accounts with visible trade execution data
  
  

It’s a huge shift in philosophy. Rather than simulating funding, these firms are actually putting capital on the line, but with one big difference:
They cap the risk through fixed drawdown rules and in some cases, work with LPs that offer rebate deals on losses.

Yes, it eats into capital — but it also eliminates the existential fear of an outsized payout. No more hoping challenge fees can cover liabilities. Just clean, capped exposure.

More Than Just Risk Management

Adopting the A-book model also has branding power.
Being able to say “we A-book everything” is the prop firm equivalent of a broker saying “we’re STP” or “we’re ECN.” It's a mark of transparency — and that can convert.

PropInsider View:

This isn’t the end of traditional prop challenges — yet.
But the direction of travel is clear. As more firms get burned by payout risk, and traders become more sophisticated, A-booking might go from ‘option’ to ‘expectation.’

And just like that, the line between prop firm and broker… keeps getting thinner.

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