What is "True Proprietary Trading"? Below is one perspective from another web site: Proprietary trading comes in many forms: There is an alternative to retail trading known as "proprietary trading." This phrase was originally created when larger full service Wall Street brokerage firms and other financial institutions employed traders to trade their capital. However, don't confuse this âtrueâ type of employee prop trading with the general proprietary trading industry, which evolved from the day trading firms of the 1990s. Most prop traders that are members of, or work in, a "proprietary trading firm" are asked to risk their own capital in front of the firm's capital. They are not employees with a job on Wall Street! These proprietary traders types are very much like retail traders because, in reality, they are risking their own money. The big difference is that these prop traders have access to far greater leverage than retail traders who have 4 to 1 leverage or margin under the pattern day trader rules and 2 to 1 otherwise. Proprietary traders often get 10 to 1or 20 to 1 leverage because a proprietary trading firm may allocate money to traders within a firm however it likes. Broker dealer prop trading firms are limited to 6 to 1 leverage overall.