From what I know: - Trader puts up initial stake. - Prop supplies market access and, in some cases, training. - Prop supplies leverage Which party takes the risk of loss that exceeds the traders initial stake? For example. Say a trader puts up 5K at a prop shop. Trader is given 5:1 leverage, and with that 25K, proceeds to lose to 7K. Who takes that extra 2K loss? Trader or Prop firm? Seems in some cases the Trader bears the risk of loss over and above his initial capital contribution. Whereas, in other setups, the Prop will take the loss.