Trading Glossary
Simple explanations for prop firm programs, futures contracts, trading rules, and common market terms. Firms may use some terms in different ways, so always check the firm’s current rules.
A
- Account Breach
- A violation of a program rule that may cause an account to fail, close, or lose eligibility for a payout.
- Account Reset
- A restart of an evaluation or account after a loss or rule violation, when the firm offers that option.
- Account Size
- The size shown for a program, such as $25,000 or $50,000. It does not always mean that amount of real money is in the account.
- Activation Fee
- A fee that may apply when a trader moves from an evaluation into another program stage.
- Allocation Limit
- The largest total account size a trader may have with a firm.
- Ask Price
- The lowest price a seller is willing to accept.
- Automated Trading
- Using software, algorithms, bots, or other systems to place or manage trades.
B
- Bid Price
- The highest price a buyer is willing to pay.
- Bid-Ask Spread
- The gap between the buy price and the sell price.
- Bracket Order
- A group of linked orders, commonly including an entry, stop loss, and profit target.
- Buying Power
- The amount a trader is allowed to control in the market.
C
- Challenge
- Another name for an evaluation. This word is common in Forex programs, but some futures firms use it too.
- Consistency Rule
- A rule limiting how much of a trader’s total profit may come from one day, one trade, or another specified period.
- Contract
- One standard unit of a futures trade. The exchange sets its size and rules.
- Contract Expiration
- The date when a futures contract ends.
- Contract Month
- The month shown in a futures contract name. It tells you when the contract ends or is settled.
- Contract Multiplier
- The number used to turn a price move into a dollar amount.
- Contract Size
- The amount of the market covered by one contract.
- Contract Value
- The total market value of one contract. It depends on the contract size and current price.
- Copy Trading
- Duplicating trades from one account, trader, or system into another account.
D
- Daily Loss Limit
- The most a trader may lose in one trading day before breaking a rule.
- Direct to Funded
- A program that lets a trader start without passing an evaluation. Each firm may use this term in its own way.
- Drawdown
- How far an account may fall before it breaks a loss rule.
E
- End-of-Day Drawdown
- A loss limit checked at the firm’s daily closing time.
- Evaluation
- A program that tests whether a trader can follow the firm’s profit and risk rules.
- Evaluation Fee
- The fee paid to enter an evaluation. Refund and reset rules vary by firm.
- Exchange
- A regulated marketplace where futures contracts are traded.
F
- Financial Settlement
- A way to end a contract by paying or receiving money instead of delivering the asset.
- Full-Size Contract
- The regular-size version of a product. Its value depends on the specific contract.
- Funded Account
- An account or program described by a firm as funded after a trader meets its requirements. It may still be simulated, so the firm’s terms should be checked.
- Futures Contract
- An agreement to buy or sell something at a future time under set rules.
H
- Hedging
- Taking a position intended to reduce or offset the risk of another position.
I
- Initial Margin
- The amount a trader must have to open a futures trade.
- Instant Funding
- A program that gives access without a normal evaluation. The rules and meaning vary by firm.
L
- Leverage
- Using a small amount of money to control a larger trade. It can increase both gains and losses.
- Limit Order
- An order to buy or sell only at a chosen price or a better price.
- Liquidation
- Closing a trade or account, often because a loss rule was reached.
- Liquidity
- How easy it is to buy or sell without moving the price very much.
- Live Account
- An account connected to live-market trading or execution. Providers may use the term differently, so their documentation should be checked.
- Long Position
- A trade that usually gains value when the market price rises.
M
- Maintenance Margin
- The amount a trader must keep to leave a futures trade open.
- Margin
- Money or account value needed to open or keep a futures trade.
- Margin Call
- A request to add money or close trades because the account is too low.
- Mark-to-Market
- Updating the value of an open trade using the current market price.
- Market Depth
- A view of buy and sell orders at different prices.
- Market Order
- An order to buy or sell as soon as possible at the best available price.
- Market Session
- A set time when a market is open for trading.
- Maximum Funded Accounts
- The maximum number of accounts a trader may hold or operate with a firm.
- Maximum Loss
- The most an account may lose before it fails or closes.
- Maximum Position Size
- The largest trade or number of contracts allowed.
- Micro Contract
- A small version of a futures contract. Its exact size depends on the product.
- Micro Single-Stock Future
- A small futures contract based on one company’s stock.
- Mini Contract
- A smaller version of a standard futures contract. Its exact size depends on the product.
- Minimum Payout
- The minimum profit or amount that must be reached before a payout may be requested.
- Minimum Trading Days
- The minimum number of separate trading days required to pass a program or qualify for a payout.
N
- Nano Contract
- A very small futures contract. CME E-nano equity contracts are one-tenth the size of the matching Micro E-mini contracts.
- News Trading
- Opening, closing, or holding trades during or around scheduled economic announcements or other market-moving news.
- No Activation Fee
- A program feature indicating that no separate activation fee applies under the stated conditions.
- No Recurring Fee
- A program feature indicating that no recurring subscription or maintenance fee applies under the stated conditions.
- Notional Value
- The total value of a contract before margin is counted.
O
- One-Time Payment
- A fee structure in which the stated program fee is paid once rather than on a recurring schedule.
- Open Interest
- The number of futures contracts that are still open.
- Order Book
- A live list of buy and sell orders.
- Overnight Holding
- Keeping a trade open after the trading day ends.
P
- Payout
- Money a firm pays to a trader under its payout rules.
- Payout Buffer
- Profit that must stay in the account before a payout can be made.
- Payout Frequency
- How often a trader may ask for or receive a payout.
- Payout Maximum
- A limit on the amount that may be withdrawn during a specified period or account stage.
- Payout Policy
- The firm’s rules governing eligibility, timing, amount, verification, and processing of payouts.
- Platform
- Software used to view markets, place trades, manage an account, or connect to a data feed.
- Point Value
- The dollar value of a one-point move in a contract.
- Position
- A trader’s open market trade.
- Position Sizing
- Choosing how many contracts to trade based on risk and account size.
- Price Limit
- A rule that limits how far a contract’s price may move in a set time.
- Profit and Loss (P&L)
- The money gained or lost on a trade or account.
- Profit Split
- The share of eligible profits paid to the trader and the firm.
- Profit Target
- The profit needed to pass an evaluation or reach a program goal.
- Prop Firm
- A firm that offers trading evaluations, accounts, or funding programs under its own rules.
R
- Realized P&L
- The gain or loss from trades that have been closed.
- Reset
- A paid or included option to restart an evaluation or account after a rule violation or loss.
- Risk Management
- Ways to control possible losses, such as using smaller trades or stop losses.
- Risk-Reward Ratio
- A comparison of what a trader could lose with what the trader hopes to gain.
- Rollover
- Moving a trade from an ending futures contract into a later one.
S
- Scaling
- Increasing account size, contract limits, payout access, or other benefits after meeting specified conditions.
- Settlement Price
- The official price used to value and settle a futures contract each day.
- Short Position
- A trade that usually gains value when the market price falls.
- Simulated Account
- An account that uses practice trades instead of sending trades straight to a live market.
- Single-Stock Futures
- Futures contracts based on one company’s stock. They are not stock options.
- Slippage
- The difference between the price expected and the price received.
- Soft Breach
- A rule violation that may trigger a restriction, warning, or account action without necessarily ending the program immediately.
- Spread
- The gap between two prices, or a trade using two related contracts.
- Standard Contract
- Another name for a full-size contract when smaller versions are also offered.
- Stop Loss
- An order or rule used to limit a trade’s loss.
- Stop Order
- An order that becomes a market order after a chosen price is reached.
- Stop-Limit Order
- An order that becomes a limit order after a specified stop price is reached.
- Straight to Funded
- A program that skips a normal evaluation. See also Direct to Funded and Instant Funding.
T
- Take Profit
- An order used to close a trade after a chosen profit level is reached.
- Tick
- The smallest price move allowed for a contract.
- Tick Size
- The smallest price step for a contract.
- Tick Value
- The dollar value of one tick.
- Trading Day
- A day when a trader places trades that count under the program rules.
- Trading Hours
- The times during which a market, platform, or prop-firm program permits trading.
- Trading Rules
- The rules for losses, trading times, news, position size, payouts, and banned strategies.
- Trailing Drawdown
- A loss limit that moves as the account reaches new highs.
U
- Underlying Stock
- The company stock followed by a single-stock future.
- Unrealized P&L
- The gain or loss on a trade that is still open.
V
- Verification Date
- The date when information was last checked.
- Volatility
- How quickly and how much prices move.
- Volume
- The number of contracts traded during a period.
W
- Weekend Holding
- Keeping a trade open over a weekend.
- Winning Days
- Trading days that meet the firm’s rule for a profitable day.
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Important reminder. These are general explanations, not replacements for a prop firm’s current terms. Before paying for an evaluation or account, review the provider’s rules, pricing, payout policy, restricted-country list, and other conditions directly.
Last updated: October 12, 2026
