Most prop firms don’t actually sell traders access to a funded account — they sell the “feeling” of big capital. In ads you constantly see numbers like $100,000, $200,000 or even $500,000 “for trading”, although in practice a trader almost never gets to use that full amount. The trick is that only one parameter truly matters — the maximum drawdown. That’s the real size of the funded risk the trader actually receives.
Here’s the math.
If a prop firm offers a $100,000 account with a 10% total drawdown, then in reality the trader isn’t trading a hundred thousand — they’re trading a loss limit of $10,000. That’s the real working deposit inside the funded account.
The problem is that many traders compare prop firms only by the numbers shown in ads, not by the actual value of the programs. In reality, two challenges that look identical on the surface can differ in efficiency several times over. That’s why on BestPropTop, on the program selection page, we calculate the Balance Index (BI) — a metric that helps quickly evaluate the real value of a challenge.
In simple terms, BI answers one question: how much real trading potential does a trader get for every dollar spent?
The formula looks like this:
BI = (Balance × Drawdown × Profit Split) / Program Cost
The formula may look complicated, but in reality it combines just three key parameters:
- Risk provided — how much loss the firm allows;
- Profit retention — how much profit the trader keeps;
- Program cost — how much access to this program costs.
Without this calculation, a trader sees only the marketing wrapper. With the balance index, the real price‑to‑value ratio becomes visible.
Let’s look at an example:
Imagine two funded accounts that both cost $280.
Example 1.
A company offers a $10,000 balance, 3% drawdown, and a 70% profit split. A very typical “ten‑thousand account”. Every second prop firm offers something like this. But if you remove the marketing and look at the real loss limit, it turns out the trader can actually lose only $300. That’s the real amount they’re trading with.
In other words, the company isn’t giving “$10,000 to manage”, but access to risk capped at $300.
After factoring in the program cost and profit split, the balance index is only 0.75. This means that for every dollar invested, the trader receives less than one dollar of real trading potential — and still has to share profits. Essentially, the trader pays a high price for very limited risk.
Now another example.
Same $10,000 balance, same $280 price — but the drawdown is 6%, and the profit split is 90%.
Here the maximum allowed loss is already $600. So the trader gets twice the real working risk for the same money. The balance index jumps to 1.92.
This means that for every dollar invested, the trader gets almost two dollars of trading potential. The conditions are far more favorable, even though both offers look almost identical from the outside.
This is the whole point of BI.
BI lets you see the difference between “a big balance in the ad” and how much real risk the company actually gives you for your money — in just a few seconds.
It’s especially useful during promos and discounts. When a prop firm lowers the challenge price, BI automatically increases.
For example, the Black Pepper program from SpiceProp has a standard BI of about 19.8.
ИБ = 300000 × 11% × 90% / 1499 ≈ 19.81
But during a discount, the program price drops — and the index rises to around 27. For the prop trading market, that’s a very high value.
Of course, the balance index doesn’t measure everything.
It doesn’t account for execution quality, company reputation, payout speed, or strategy restrictions. But as a tool for quick evaluation, it works extremely well. If you’re looking for a partner firm to enter prop trading, the balance index helps compare companies by what truly matters: how much real trading potential they give you for the money you invest.