Wilbur

Big news 💥 Kraken 🤝 @Breakoutprop = a new path for elite crypto traders. ✅ Get funded with up to $200K ✅ No personal deposit ✅ Keep up to 90% of the profits Are you ready to scale your trading strategy?

BREAKOUT IS MIGRATING 🚨 We are migrating to a new dashboard system on Wednesday, February 12th. There should be no interruption to your trading. Please read the full details on our blog 🫡 breakoutprop.com/article/das…

Eric J. is one of Breakout’s BEST traders. He’s made $11,807 in payouts having spent $1,760. That’s a 571% gain. Or a 6.71x. You don’t need memecoins to get big multipliers. 🏆

A Prop Firm CEO's Take on Payouts Payouts are the core function of the evaluation-based prop trading industry. At the end of the day, all the procedural nonsense about rules and platforms aside, traders getting paid is most important and the very essence of trading with a prop firm. Philosophically, there's no compelling reason why traders shouldn't be able to receive payouts every day (if not on demand). They earned the funded account and were manually approved after passing the evaluation. In theory, they should therefore be able to withdraw their gains quickly and efficiently. For context, depending on the type of firm and conditions associated with payouts, the industry average for payouts is something around 2 weeks i.e. traders must wait 14 days after their first payout before they are eligible for another one. There are many permutations of this rule which complicates matters further Some firms have more frequent payouts but with a consistency rule attached to them. Other firms will offer a range of payout frequencies but with a variable split depending on the payout frequency. Firms may offer the first payout very quickly but have longer waiting periods for subsequent payouts. It's also not uncommon to see faster payouts added as an add-on (i.e. upsell) at the point of purchase. And so the list goes on. At @Breakoutprop, we offer daily payouts to all funded traders, for free. This applies to all payouts (not just the first one), at all times, including weekends, and with 0 payout denials to date. Our traders love this feature. It is a lot of manually intensive work for our team, but it creates great peace of mind for our traders. It is also trader-friendly: you're not arbitrarily forced to trade or forced to wait to get the gains you earned. This raises an interesting question: if daily payouts (or high frequency payouts in general) are so popular, why aren't more firms offering them? Practically, there are reasonable grounds for adding a delay to payout eligibility. Two reasons in particular come to mind. One is well-justified, the other is somewhat precarious but more likely to be the true driving force. One reasonable justification to implement a waiting period for payout eligibility, is to allow the firm to manually review the account's trading history to ensure no rules were broken. Especially for firms with many trading-related restrictions, ensuring that none of those restrictions were broken can be an onerous process. This justification is somewhat grounded and sounds good in principle, but in my view, it does not justify a waiting period that's measured in weeks. Candidly, it is my view that prop firms present this reasoning to mask the real reason for delayed payout eligibility. That real reason is to manage cash flow. This works in two ways. First, longer waiting periods for payout eligibility reduce net payouts as traders are more likely to continue trading and breach before reaching a payout. The implementation of a consistency rule - something we do not have at Breakout - also achieves this by forcing traders to take more trades before they're eligible for a payout. Second, longer waiting periods for payout eligibility allow firms to accrue more revenue from new evaluation sales and thus create a "buffer" with which to honor outstanding and upcoming payouts. If a firm reaches a point where it is cash flow insolvent i.e. liabilities (payouts, operating costs) exceed assets (primarily revenue from evaluation fees), it is functionally dead in the water. This typically occurs when a firm’s product is mispriced (see my tweet from last week to learn more on this). This creates a vicious cycle or cascading effect where any material payout delays or denials simultaneously increase liabilities (traders get spooked and request payouts all at once) and decrease assets (fewer evaluation purchases if traders see the delays or denials, and are unsure that the firm can operate). To mitigate this, adding a delay for payout eligibility allows firms to shore up cash reserves from new evaluations so they can stomach a wave of simultaneous payouts if necessary. In reality, most rule changes, restrictions, changes in pricing, and other prop firm variables can be boiled down to the following principle: ensuring that liabilities (payouts, operating costs) do not exceed assets (primarily revenue from evaluation fees). And payout eligibility is no exception. At Breakout, we took a gradual and measured approach to increasing our payout frequency to what it is now. We carefully looked at pass rates, trading history and behaviors in the funded stage, and many other variables to build accurate financial models backed by real data for a worst case scenario. Over time, as we continued to grow and scale, we reduced our payout frequency from the standard 2 weeks after funded + every 2 weeks, down to 1 day after funded + every 7 days, and now all the way to 1 day after funded + daily. Our robust balance sheet and patient approach has allowed us to progress to daily payouts - it was not a switch that we could simply turn on overnight. With our recent $4.5M venture round and continued growth, Breakout is in a prime position to continue offering daily payouts, no payout denials, and a host of other upgrades and features that will be coming very soon. The harsh take home point is that firms don't offer daily payouts because they can't justify doing so from a cash flow perspective because their products are mispriced from the outset. I hope this piece has provided some insights on payouts in the prop trading space. If there are other topics you'd like me to discuss, please let me know.