In preparation for the launch of Prop Pulse, Brokeree Solutions conducted a comprehensive market analysis of 80+ dealer finance companies in Q1 2024. In Q4, the survey was repeated using the same sample and methodology to understand significant changes in trade sector. during the past year. In this article, we will discuss some of the findings and highlight the most important trends in this area.
The research initially analyzed more than 146 item trading companies. However, only 82 of them were included in the final sample based on the similarity of business models. Using publicly available data, Brokeree collected and analyzed information about:
- Country of registration;
- Trading platforms are used.
- Fees for challenges.
Here the differences between the results from the first and last quarter of 2024.
Changes to the Prop Trading Landscape in 2024
By Q4 2024 only 71 of the 82 companies remained operational — a survival rate of 86.6%. The significant increase in the number of startups trading prop in late 2023 and early 2024 led to a slight decrease in the number of companies operating by the end of the year. This trend suggests a natural market correction that eliminated less viable business models. It is likely that this consolidation trend will continue until 2025.
Events that affected the market and led to the closure of some companies were: increased regulatory scrutiny of trading companies in the United States starting in mid-2024 and the closing of trading platforms. These changes were reflected in the geographical distribution of support firms and their trading platform preferences.
Geography
The United States and the United Kingdom maintained their market leadership in early 2024. They accounted for 60% of the total country volume. These countries maintained their leading position until the end of the year despite experiencing a decline in registered businesses from the sample size. Notably, the UAE emerged as a popular destination for support companies, increasing its market share from 8% to 15%.
At the same time, the number of countries in which harness companies were registered has decreased due to a decrease in offshore registrations. This trend suggests clustering and the emergence of industrial hubs and corresponds with similar trends in the retail industry.
Trading platforms
Platform usage patterns changed significantly throughout 2024. Although Metaquotes (MetaTrader 4 and 5) is still the largest player in the market, MetaTrader’s share among other trading platforms fell from 48% in the first quarter to 24% in the fourth quarter. The remaining share was distributed between cTrader, Tradelocker, DXTrade and Match Trader resulting in 42%.
Importantly, the number of trading platforms has increased over the year. Support companies have started to provide users with more options and have connected multiple platforms to their infrastructure. In the first quarter of 2024, each company had an average of 1.8 platforms, but by the end of the year, that number had risen to 2.6.
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Find out more about the research from the Brokeree team at the Finance Magnates London Summit between 18 and 20 November 2024 on stand 59.
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Offers
Proprietary trading companies typically structure their offerings in tiers. Lower-cost challenges provide accessible entry points for new customers, whereas premium offers entice customers to reduce the number of assessment steps and manage a larger account.
Since the beginning of the year the “core” of the offer has not changed significantly, but the industry has moved from a wide range of offers to more standardized conditions. This resulted in a reduced difference between the minimum challenge price and funded account size and fewer opportunities to access large trading accounts with minimal entry fees. There has also been a shift in offerings that favor current trading conditions, rather than progressive capabilities and scaling plans.
Start prop trading with Brokeree Prop Pulse
Broker Prop Pulse is an account management solution for trading firms that allows firms to create multi-step challenges to evaluate and identify traders.
The system allows brokers to create comprehensive multi-step challenges to evaluate traders with many customizable indicators, targets and conditions at each step, ensuring precise setting of challenge conditions. As marketers complete a step, Prop Pulse smoothly moves them to the next level until they complete the entire challenge.