Many contracts for difference (CFD) brokers now offer prop trading, but is it a supplementary service or a clever strategy for converting traders? Drew Niv recently revealed that more than 10 per cent of traders on ATFunded, the prop brand of ATFX, have converted to brokerage customers in South America.

The comments of Niv, Chief Strategy Officer at ATFX, were made during his debate with Brendan Callan, CEO at Tradu, at the recently concluded Finance Magnates London Summit.

While ATFX entered the prop trading industry last year, Tradu is yet to launch a prop platform.

Is Prop Trading a Convenient Marketing Tool for Brokers?

Niv further explained that the more “serious” the prop trading challenges are, the higher the chances of converting the traders on the simulated platform as brokerage customers. This clearly shows the use of prop platforms as a conversion channel for brokers.
According to data published earlier, over 6 per cent of traders who bought prop challenges on ATFunded secured funded accounts in June 2025.

Interestingly, an earlier study shows that South America is one of the leading markets in terms of the number of active prop traders. Colombia leads all countries in participation, with almost 15 per cent of prop firms’ clients, followed by the United States and Brazil.
The first batch of CFD brokers to enter the prop trading space were Hantec, Axi and OANDA, followed by an array of other retail brokers launching prop platforms, including IC Markets, Blueberry Markets and many others.

Unlike brokers, who typically earn from spreads and commissions, prop platforms generate the majority of their revenue from challenge fees. Also, as the prop model requires payouts, the risk management model differs from brokers.

The complexity around prop risk management also encouraged many industry experts to launch prop-specific risk management consultations and services.

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Prop Platforms Are Now Becoming Brokers

Although many prop platforms shuttered, the top ones are minting money. FinanceMagnates.com recently reported that the parent company of prop trading platform FTMO netted over $62 million in profits on revenue of $329 million in 2024. A year earlier, only the prop unit brought in over $213 million in turnover.

Interestingly, a few prop platforms are also entering the brokerage industry. FTMO’s agreement to acquire OANDA, a deal expected to close by the end of 2025, also highlights the significant growth and influence of some prop firms.

The cross-integration of brokerages and prop firms, along with Niv's recent revelation, clearly indicates that prop trading is becoming a key customer acquisition channel for brokers to attract traders to their brokerage platforms.

It also makes sense as adverts for prop trading, which are not categorised as financial services, face much less scrutiny compared to a CFD trading ad, a high-risk instrument.

FinanceMagnates.com earlier reported on how prop trading platforms have captured India, a major market for retail trading, by promoting themselves as education platforms and not even using the terms "forex" or "CFD." Although Niv’s data is for the South American market, those Indian prop traders can also be introduced to brokerage services.

Source: Finance Magnates