# Prop firm operator glossary > 47 terms a prop firm operator meets when choosing technology, defined in plain English. **Source:** https://proptechpal.com/glossary **Generated:** 2026-09-24 **Publisher:** Prop Tech Pal — independent prop firm technology comparison _Disclosure grades measure what a vendor publishes, never product quality. A vendor publishing a weak SLA scores better than one publishing none._ --- ## The prop firm business model - **[Affiliate programme](https://proptechpal.com/glossary/affiliate-programme)** — Paying partners a commission for challenge sales they refer, tracked by link or code. - **[Challenge fee](https://proptechpal.com/glossary/challenge-fee)** — What a trader pays to attempt an evaluation. For an evaluation-model prop firm it is the main revenue line. - **[Disclosure grade](https://proptechpal.com/glossary/disclosure-grade)** — Prop Tech Pal’s A–E measure of how much of the diligence surface a technology vendor publishes — price, contract terms, security certifications, uptime and more. - **[Evaluation model](https://proptechpal.com/glossary/evaluation-model)** — A prop firm business model in which traders pay a fee to attempt an evaluation, and those who pass trade a funded account for a share of the profits. - **[Introducing broker](https://proptechpal.com/glossary/introducing-broker)** — A partner who refers clients to a broker or prop firm and is paid per client or on their activity. - **[Payout](https://proptechpal.com/glossary/payout)** — A payment of profit share to a funded trader. - **[Profit split](https://proptechpal.com/glossary/profit-split)** — The share of a funded trader’s profits paid to the trader, with the rest kept by the firm. - **[Revenue share](https://proptechpal.com/glossary/revenue-share)** — A pricing model in which a technology vendor takes a percentage of the prop firm’s sales instead of, or on top of, a fixed fee. - **[Simulated funded account](https://proptechpal.com/glossary/simulated-funded-account)** — A funded account whose trades are not sent to a real market. The trader’s profit share is paid by the firm from its own revenue. ## Technology and deployment - **[Back office](https://proptechpal.com/glossary/back-office)** — The operations side of a prop firm: payouts, KYC checks, invoicing, affiliate commissions, certificates and reporting. - **[Open API](https://proptechpal.com/glossary/open-api)** — A documented interface that lets the firm’s own systems read and change data in the vendor’s product. - **[Prop firm CRM](https://proptechpal.com/glossary/prop-firm-crm)** — The system that runs the trader side of a prop firm: sign-ups, challenge purchases, the trader dashboard, emails and support. - **[Risk engine](https://proptechpal.com/glossary/risk-engine)** — The system that checks every account against the firm’s rules — drawdown, daily loss, consistency, prohibited strategies — and flags or acts on a breach. - **[SaaS](https://proptechpal.com/glossary/saas)** — Software the vendor hosts and runs, which the firm uses through a subscription. - **[Self-hosted](https://proptechpal.com/glossary/self-hosted)** — Software licensed to run on the firm’s own servers or cloud account rather than the vendor’s. - **[Server licence](https://proptechpal.com/glossary/server-licence)** — Running your own instance of a trading platform’s server, rather than a white label that shares the vendor’s. - **[Server plugin](https://proptechpal.com/glossary/server-plugin)** — Software installed on a trading platform’s server to add behaviour it does not have — most often risk rules for prop accounts. - **[Trader dashboard](https://proptechpal.com/glossary/trader-dashboard)** — The branded web area where a trader buys challenges, follows their rules and progress, and requests payouts. - **[Trading platform](https://proptechpal.com/glossary/trading-platform)** — The software traders place orders in — MT5, cTrader, Match-Trader, DXtrade, TradeLocker or a vendor’s own. - **[Turnkey solution](https://proptechpal.com/glossary/turnkey-solution)** — A package that bundles everything needed to open — platform, risk engine, CRM, payments and KYC integrations, sometimes the website — ready to switch on. - **[White label](https://proptechpal.com/glossary/white-label)** — Running a prop firm on another company’s platform, risk engine and CRM under your own brand. ## Risk and rules - **[Breach](https://proptechpal.com/glossary/breach)** — An account crossing one of the firm’s rules, which ends or suspends it. - **[Consistency rule](https://proptechpal.com/glossary/consistency-rule)** — A rule limiting how much of an account’s total profit may come from a single day or trade. - **[Daily loss limit](https://proptechpal.com/glossary/daily-loss-limit)** — The most an account may lose within one trading day, measured from that day’s starting balance or equity. - **[Drawdown](https://proptechpal.com/glossary/drawdown)** — The loss limit on an account, measured from a reference balance. Breaching it ends the evaluation or the funded account. - **[Exposure monitoring](https://proptechpal.com/glossary/exposure-monitoring)** — Watching the firm’s aggregate open positions across all accounts, by instrument and direction. - **[News trading restriction](https://proptechpal.com/glossary/news-trading-restriction)** — A rule barring trades opened or closed within a window around scheduled economic releases. - **[Prohibited strategies](https://proptechpal.com/glossary/prohibited-strategies)** — Trading behaviour a firm’s rules forbid — commonly latency arbitrage, tick scalping, hedging across accounts and copying other traders. - **[Trailing drawdown](https://proptechpal.com/glossary/trailing-drawdown)** — A drawdown limit whose floor rises as the account makes new highs, so profit already made can count against the trader. ## Execution and liquidity - **[A-book](https://proptechpal.com/glossary/a-book)** — Routing a trader’s orders to an external liquidity provider, so the market — not the firm — is the counterparty. - **[B-book](https://proptechpal.com/glossary/b-book)** — Keeping a trader’s orders in-house, with the firm as the counterparty. In the evaluation model this is the simulated account. - **[Bridge](https://proptechpal.com/glossary/bridge)** — Software that connects a trading platform’s server to one or more liquidity providers and passes orders and prices between them. - **[Hybrid model](https://proptechpal.com/glossary/hybrid-model)** — Keeping most flow in-house (B-book) and routing selected traders or trades to the market (A-book), chosen by rules. - **[Latency arbitrage](https://proptechpal.com/glossary/latency-arbitrage)** — Trading against prices that lag the real market — a slow feed — to capture a move that has already happened elsewhere. - **[Liquidity aggregation](https://proptechpal.com/glossary/liquidity-aggregation)** — Combining prices from several liquidity providers into one order book and routing each order to the best available quote. - **[Liquidity provider](https://proptechpal.com/glossary/liquidity-provider)** — The institution that quotes prices and takes the other side of orders routed to the market. - **[Price feed](https://proptechpal.com/glossary/price-feed)** — The stream of prices a trading platform shows and fills against. Even a simulated account needs one. - **[Prime of prime](https://proptechpal.com/glossary/prime-of-prime)** — A firm that holds prime brokerage relationships with large banks and resells that access to smaller brokers and prop firms that could not get it directly. - **[Slippage](https://proptechpal.com/glossary/slippage)** — The difference between the price a trader asked for and the price the order filled at. - **[Toxic flow](https://proptechpal.com/glossary/toxic-flow)** — Order flow that profits consistently from an information or speed advantage over the counterparty rather than from market views. ## Payments and compliance - **[AML](https://proptechpal.com/glossary/aml)** — Checks that stop a business being used to move illicit money — sanctions and watch-list screening, source-of-funds questions, transaction monitoring. - **[Chargeback](https://proptechpal.com/glossary/chargeback)** — A card payment reversed by the cardholder’s bank after a dispute, with the money and a fee taken back from the merchant. - **[High-risk merchant account](https://proptechpal.com/glossary/high-risk-merchant-account)** — A card-processing account for businesses a processor classes as higher risk, with higher fees, rolling reserves and closer monitoring. - **[KYC](https://proptechpal.com/glossary/kyc)** — Checking that a trader is who they say they are, usually with an ID document and a selfie, through a specialist provider. - **[Payment processor](https://proptechpal.com/glossary/payment-processor)** — The company that takes a trader’s card or crypto payment for a challenge and settles it to the firm. - **[Payout rail](https://proptechpal.com/glossary/payout-rail)** — The method used to pay traders and affiliates — bank transfer, crypto, or a payout platform. - **[Restricted jurisdictions](https://proptechpal.com/glossary/restricted-jurisdictions)** — The countries a firm will not sell to or pay out to, because of sanctions, regulation or its own payment providers’ rules.