Payout cap
Also known as: prop firm payout cap, maximum payout, payout limit
Payout cap: A payout cap is the maximum amount a prop firm pays a funded trader in a single payout or payout cycle; profit above the cap stays on the account or is paid in later cycles, depending on the programme.
How does a payout cap work?
A cap limits each payout, whatever the profit on the account. The5ers, for example, caps each payout on a $100K High Stakes account at $4,000, and Topstep caps each payout on a $100K Express Funded Account at $3,000 or $4,000 depending on the payout path. Programmes without a cap pay the full eligible profit, subject to the profit split: how do prop firm payouts work?
Worked example
Illustrative only: a funded account makes $9,000 in a payout cycle, the profit split is 80% and the payout cap is $4,000. The trader’s share is $7,200, but only $4,000 is paid in this cycle; the rest depends on the programme’s rules for the next cycle.
Sources
Regulatory and official sources
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Related terms
- Payout
A prop firm payout is the payment of a funded trader's share of eligible profits, made by the firm under its profit split and payout rules.
- Profit split
A profit split is the percentage of eligible profits on a funded prop firm account that the firm pays to the trader; the firm keeps the rest.
- Funded account
A funded account is the prop firm account a trader receives after passing a challenge, or directly through instant funding, on which profits are shared under the firm's profit split.