5 minute read
Is Pepperstone a Prop Firm? Get the Truth
from Pepperstone Trading
by Jone Eva
Proprietary trading firms—or “prop firms”—have surged in popularity, offering traders funded accounts and performance-based payouts. With brokers like Pepperstone often mentioned in these discussions, it’s no surprise many ask: Is Pepperstone a prop firm?
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What is a Prop Firm?
Definition of Proprietary Trading Firms
A prop firm (proprietary trading firm) provides capital to traders, allowing them to trade without risking their own funds. In return, the firm typically:
Evaluates traders through a demo challenge
Offers a funded account upon success
Shares profits (e.g., 80/20 split)
How They Differ from Brokers
While brokers facilitate trading by providing access to markets and execution platforms, prop firms fund and train traders using internal capital. Brokers make money on spreads and commissions, while prop firms earn from traders’ performance.
Overview of Pepperstone
Company Background
Pepperstone is an Australian-founded forex and CFD broker established in 2010. It provides access to:
60+ forex pairs
Indices, commodities, and crypto CFDs
Global markets via MetaTrader 4/5 and cTrader
Services and Licensing
Pepperstone is licensed and regulated by:
ASIC (Australia)
FCA (UK)
DFSA (Dubai)
CySEC (EU)
SCB (Bahamas)
Its focus is on execution, liquidity, and platform technology, not funding traders.
Does Pepperstone Offer Proprietary Trading?
What the Website States
Pepperstone does not advertise any proprietary trading program. It does not provide funded accounts, evaluation challenges, or profit-sharing models like FTMO or The5ers.
Differences in Funding Model
Pepperstone: Traders use their own capital
Prop Firm: Traders use firm-provided capital after passing evaluation
Key Differences Between Pepperstone and Prop Firms
FeaturePepperstoneProp Firms (e.g., FTMO, MyForexFunds)Capital SourceClient's personal fundsFirm’s internal capitalEvaluation Phase❌✅ (via trading challenge)Funded Accounts Offered❌✅Payout/Profit Sharing❌✅ (usually 70–90%)FocusMarket access, low spreadsTalent discovery, trader growth
Is Pepperstone Used by Prop Firms?
Platforms Like FTMO and MyForexFunds
Yes, many prop firms allow traders to choose Pepperstone as their broker. This is because Pepperstone offers:
High-speed execution
Deep liquidity
Secure infrastructure
Broker Partnerships
While Pepperstone is not a prop firm, it is often used as the execution broker for many external prop firms. In such cases:
The prop firm owns the funded account
The trades are executed via Pepperstone infrastructure
Pepperstone Account Types and Features
Razor and Standard Accounts
Razor Account: Tight spreads from 0.0 pips, ideal for scalpers and EAs
Standard Account: No commissions, slightly wider spreads
Commission Structure and Leverage
Up to 1:500 leverage (varies by jurisdiction)
$3.50 per lot (Razor)
MetaTrader 4, 5, and cTrader available
These features make Pepperstone prop-trading friendly, though it does not fund traders directly.
Pepperstone’s Regulatory and Operational Model
STP and ECN Execution
Pepperstone is a No Dealing Desk (NDD) broker. It routes trades to liquidity providers with:
Straight Through Processing (STP)
Electronic Communication Network (ECN) execution
No Internal Trading Desk
Pepperstone does not take the opposite side of your trade. This is the opposite of how some B-Book prop firms operate internally.
Why Traders Confuse Pepperstone with a Prop Firm
Affiliate and Funded Account Misconceptions
Some affiliates or educators use Pepperstone accounts to simulate a “funded” experience.
Funded traders from third-party prop firms may use Pepperstone as their platform, creating the illusion of a direct connection.
This misunderstanding leads some to believe Pepperstone offers its own proprietary funding, which is incorrect.
Can You Become a Funded Trader with Pepperstone?
Working with External Prop Firms
Yes, if you pass an evaluation with FTMO or another prop firm that supports Pepperstone, your live trades may be executed through a Pepperstone server.
Account Integration
You don’t open a Pepperstone account directly—the prop firm handles account setup and risk controls. You simply trade through Pepperstone’s infrastructure if that broker is selected by the firm.
FAQs – Is Pepperstone a Prop Firm?
1. Is Pepperstone a proprietary trading firm?
No. Pepperstone is a broker, not a prop firm. It does not fund traders or offer evaluation challenges.
2. Can I trade a funded account with Pepperstone?
Yes, but only through third-party prop firms like FTMO that use Pepperstone as their broker.
3. Does Pepperstone offer profit-sharing models?
No. All profits and losses are your own unless you’re working with a separate prop firm.
4. Can I become a funded trader through Pepperstone directly?
No. You must apply through a proprietary trading firm.
5. Why do prop firms use Pepperstone?
Because it offers fast execution, deep liquidity, and advanced trading tools—ideal for professional trading.
6. Can I use my Pepperstone account to join a prop firm?
Some firms allow integration, but most require you to trade on their internal accounts with Pepperstone as the backend broker.
Conclusion: Is Pepperstone a Proprietary Trading Firm?
No—Pepperstone is not a prop firm. It is a globally regulated broker that offers world-class execution, low spreads, and professional-grade platforms. While it doesn’t offer funded accounts or trader evaluations, it is often used by external prop firms as a reliable backend for executing funded accounts.
If you're a trader looking for direct market access, competitive spreads, and seamless execution, Pepperstone is an excellent broker—but if you're looking to trade with someone else's capital, you’ll need to work with a separate prop firm.
👉 Trade Professionally with Pepperstone and access fast execution, deep liquidity, and industry-trusted platforms.
See more:
Is Pepperstone a Regulated Dubai
Is Pepperstone a Regulated by FCA
