You also have CFD prop firms like IG markets which are ridiculously profitable with a market cap of 4 billion pounds. They are also trading against the trader so to speak, but they are ridiculously profitable because they will hedge in the real market against the winning traders they ID. This is similar to Topstep who is also hoping you will lose. IG markets ain't going anywhere, and neither is Topstep.
"Topstep is able to successfully A-book winning traders" AT WHAT STAGE would they deice A book or B book? and there is still risk if whatever risk management tool they use does not work lot of B booking could blow up the "firm" Same as any OTC product "broker"
My mistake, it is actually IC markets, not IG markets which is a cfd broker but also cfd prop firm. If I ever try to master swing trading I will check out broker backed cfd prop firms like them. ThinkCapital is one that accepts US traders. (futures prop firms don't let you swing trade).
Absolutely, there is risk in A booking a trader who simply hit a home run by going all in one min before CPI news. Topstep has the data and does the math, to be able to ID winning traders, on average. If they can't then yeah, their business model is defunct.