Introduction
Although options trading has a large potential for profit, raising enough money might be difficult. Proprietary (prop) businesses’ funded trading accounts provide a solution, but do they permit options trading? The solution isn’t always clear-cut. We’ll go over whether you may trade options on a funded account, any potential limits, and how to take full advantage of this opportunity in this article. Regardless of your level of expertise, this post will help you make wise selections by elucidating important aspects..
What Is a Funded Trading Account?
Capital given to experienced traders by a private trading business is known as a funded trading account. Traders employ the company’s cash and split earnings according to predetermined conditions rather than risking their own money.
How Funded Accounts Work
Traders pass an assessment (such as risk rules and profit objectives). Candidates that are accepted are given a financed account with predetermined restrictions. The trader and the company divide profits (e.g., 80/20). The main emphasis of well-known prop businesses like FTMO, Topstep, and Earn2Trade is forex and futures. However, what about alternatives?
Can You Trade Options on a Funded Account?
In a nutshell, it depends on the prop company. Options trading is restricted by the majority of conventionally financed programs because of its high risk and complexity. Some businesses do permit it, however.
Prop Firms That Allow Options Trading
| Firm Name | Options Trading Allowed? | Key Restrictions |
| FTMO | ❌ No | Forex/Futures only |
| Topstep | ❌ No | Futures-focused |
| Apex Trader Funding | ✅ Yes (via Micros) | Limited to index options |
| Take Profit Trader | ✅ Yes | Must pass evaluation |
Why Some Firms Restrict Options
- High Risk: Losses from options may happen quickly.
- Complexity: Needs in-depth understanding.
- Issues with Liquidity: Certain options markets lack liquidity.
Advantages of Using a Funded Account to Trade Options
Here are several benefits if the prop company of your choice allows options:
1. Leverage Without Personal Capital
With little initial investment, options may increase profits. You can grow methods with a funded account without taking on personal financial risk.
2. Diversification
To hedge holdings, combine options with other assets (such as stocks or futures).
3. Higher Profit Potential
- By selling premiums on SPX options, a trader utilizing Apex Trader Funding produced a 120% return in only three months.
Problems with Trading Options in a Funded Account
1. Strict Risk Rules
- Drawdown limits, like 5–10%, are put in place by prop companies.
- Options trading that changes quickly can easily break these.
2. Limited Strategies
- Some businesses require defined-risk spreads or don’t allow naked options.
3. Profit Splits Reduce Gains
- Even when the profits are big, the company keeps 10–30% of them.
How to Open a Funded Account and Begin Trading Options
Step 1: Select the Prop Firm of Your Choice
Look at companies that specifically permit options, such as Take Profit Trader or Apex Trader Funding.
Step 2: Pass the Evaluation
- Throughout the trial, adhere to dependable, low-risk tactics.
- Steer clear of excessive leverage.
Step 3: Understand the Rules
- Verify the contract’s size restrictions.
- Verify authorized tactics (such as covered calls vs iron condors).
Step 4: Deploy a Profitable Strategy
- For instance, sell cash-secured options on ETFs with significant liquidity (like SPY).
Key Takeaways
- Options give leverage but come with stringent prop company regulations.
- Some prop companies permit options trading; do your homework.
- In order to prevent account breaches, concentrate on low-risk tactics.
Conclusion
Some flexible providers allow options trading, but not all prop businesses do. A funded account may be an effective instrument for scaling your trades without taking personal risk if you are knowledgeable about options methods.
Are you prepared to begin? Investigate options-friendly prop businesses right now to begin trading with leverage and capital efficiency
