The retail-facing prop trading sector – the funded account model that grew up around FX/CFD and futures trading platforms – spent 2024 in crisis. After a shakeout that wiped out an estimated 80 to 100 firms globally, the survivors have spent the past two years diversifying, first into futures, and now into exchange-traded options.
The move into options is the most technically demanding shift the sector has attempted. FX and CFD platforms can run on a relatively lean stack: trading front end, drawdown engine, liquidity feed, whereas options bring a fundamentally different set of requirements. And most prop firms moving into the asset class quickly discover that their existing infrastructure won’t carry the load.
For Vitaly Kudinov, Senior Vice President of Sales and Business Development at Devexperts, the question for any prop firm considering the move is whether its existing platform can absorb that complexity at all.
“Every strike and expiration is a separate instrument, so the options universe is orders of magnitude larger than the equity universe,” Kudinov tells TradingTech Insight. “That requires hardware and software capable of supporting all those instruments in a single trading environment.”
A market reshaping itself
The trajectory of the prop sector over the past 24 months helps explain why options have moved up the agenda. Many of the largest CFD-focused prop firms were forced to migrate platforms in 2024, after MetaQuotes began requiring all licence holders to hold a brokerage licence, effectively cutting off prop firms that had been operating through grey-labelled broker partners. The fallout reshaped the sector. Some firms shut down entirely; others scrambled to acquire or partner with regulated brokers. The wider lesson – that depending on a single platform vendor was a strategic vulnerability – pushed the industry to diversify its technology stacks. Devexperts says it onboarded more than 40 prop firms to DXtrade in the year that followed.
In parallel, US futures prop firms have continued to grow, and a handful of the larger ones have begun registering as introducing brokers in their own right. Topstep launched its waitlist for Topstep Brokerage – an NFA-registered IB partnered with Plus500US as its FCM – in January 2026, with live operations to follow. MyFundedFutures has been pursuing IB registration since mid-2025.
Against that backdrop, options look like the next logical expansion. Retail flow accounts for roughly half of US options volume – 2025 was a sixth consecutive record year for US listed options, with average daily volume of 61 million contracts according to Cboe – and zero-commission brokers like Robinhood and tastytrade have made options the default leveraged instrument for a generation of American retail traders. Outside the US, India, South Korea and parts of Europe show meaningful and growing options activity.
For many prop firms, the question is whether to ride that growth.
What options offer that CFDs and futures don’t
Kudinov’s commercial argument is straightforward. “Options are a unique instrument,” he says. “You have many more strategies available. You can trade direction, take a neutral position, trade volatility, write options.”
That breadth changes the proposition for both firm and trader. Where a CFD challenge tests directional risk under leverage, an options challenge can test premium pricing, volatility positioning, defined-risk structures and strategy-level risk management. For firms looking to differentiate in a crowded market, options represent a meaningful product extension.
The behavioural dimension matters too. Because evaluation challenges are run on simulated capital and payouts come from challenge fees, there’s a separation between trader experience and firm capital that changes how risk is taken.
“When you’re trading paper money, you’re braver about taking trades,” Kudinov observes. “When you know you’re trading someone else’s real money, you become more cautious, because you know you can lose a lot.”
Risk controls – maximum drawdown, position sizing, unrealised P&L limits – make the gap manageable in both directions, qualifying serious traders while protecting both firm and individual from catastrophic losses. Options also bring an analytical tool that simply doesn’t exist in spot trading: a theoretical fair value, calculated from the underlying price, strike, time to expiry, volatility and rates, against which the live market price can be compared. A trader who knows what a contract should be worth is in a position to spot mispricings and trade into them; a relative-value discipline that has no real equivalent in FX, CFDs or futures.
The qualification function itself is increasingly valuable as prop firms come to be viewed as a sourcing pipeline for outside capital.
“Sometimes you win just because you’re lucky,” Kudinov says. “But time smooths that out. After a couple of months you can clearly see which prop traders are genuinely good.” Demonstrated consistency typically earns a trader graduation from the evaluation phase to a funded account, where the firm provides the trading capital and shares the resulting profits with the trader, usually on terms heavily weighted in the trader’s favour. But there’s a longer pipeline emerging beyond that. “I know people who are actively looking for prop firms of this kind. They want to allocate their money if they can see proof that the firm has a community of consistently good performers.”
Where the technology starts to bite
Most prop firm evaluation happens in a simulated environment. Orders don’t reach the order book; execution happens against an indicative price feed at the platform level. That model works reasonably well for spot FX, CFDs and futures. For exchange-traded options, the simulator becomes the central problem.
“You can’t simulate an exchange itself with a reasonable allocation of compute resource,” Kudinov says. “Instead, you simulate execution against the market.”
The simple case is an order small enough to execute against the top of the book. Every simulator handles that. The harder case is when an order is large enough that the top of book isn’t enough to fill it. On a real exchange, the order sweeps through successive levels of the book, filling at each price level in turn. A simulator has to approximate that, typically by computing a volume-weighted average across the levels the order would have consumed. When the simulator can’t model that accurately, the consequences are immediate.
“You end up with either too many winning scenarios or too many losing ones,” says Kudinov. “To compensate, some prop firms introduce artificial slippage or delays to prevent executions. I know trading platforms that do this, but it affects user performance.”
The reputational consequences in a community-driven sector are significant. “At some point, users reverse-engineer the logic, start complaining on Reddit or Discord, the information becomes public, and people start avoiding the platform.”
Options compound the problem in two specific ways. The first is sheer instrument count. A reasonably comprehensive US options universe runs to well over a million active contracts on any given day, two to three orders of magnitude more than the total number of US stock listings. Loading and maintaining that across a multi-user simulation environment is a non-trivial engineering challenge.
The second is the absence of meaningful level-two data for most options series. Kudinov is direct on this point.
“I’ll be very straightforward here. dxFeed (the leading market data solution provider for the global capital markets and a subsidiary of Devexperts) doesn’t offer level-two market data for options, because the requirements to translate, snapshot, host and store the historical level-two data simply never pay off. It’s massive.”
Without level-two data, the simulator has to work harder. “Options execution simulation becomes quite a sophisticated algorithm,” notes Kudinov. “You limit order size, always execute at level one, and sometimes you don’t have an accurate last trade price, so you have to take the theoretical price. Sometimes, for less liquid products, the imbalance between calls and puts is so big that taking the mid-price gives you an execution you’d never get at the real price.”
An options simulator, in other words, can’t simply be a CFD simulator with more instruments loaded. The execution logic itself has to be re-engineered.
Data, risk and the rest of the stack
Behind the simulator sits the market data infrastructure, and the step up here is substantial. Peak microbursts on the Options Price Reporting Authority feed exceeded 187 million messages per second during the April 2025 sell-off, with industry recommendations now placing baseline microburst handling at around 75 million messages per second, message rates roughly 60 times those of the equity SIP. For a prop firm whose previous data infrastructure was built for FX price feeds, that’s a substantially different engineering challenge.
Latency and delivery flexibility both matter. For collocated subscribers in the exchange data centre, market data latency in the sub-100 microsecond range has become a baseline expectation for serious options operation. So has a clean separation between conflated latest-quote feeds (for low-latency decision-making) and full tick feeds (for backtesting and risk). For prop firms contemplating multi-asset access in the medium term, having a single consistent data model across crypto, listed derivatives and equities is also an architectural advantage.
Risk management diverges from the CFD model in a fundamental way. Where a CFD account can be managed largely through drawdown and account-level exposure metrics, an options account requires the platform to recognise strategy combinations and calculate risk at the strategy level rather than the account level.
The standard regime in the US is strategy-based margin under FINRA Rule 4210 – sometimes referred to colloquially as Reg T margin – under which defined option strategies have margin requirements reflecting the limited risk of the structure rather than treating each leg independently. For larger and more sophisticated accounts, portfolio margin offers a risk-based alternative, grouping positions by underlying and running stress tests across the group.
For prop firms, portfolio margin becomes meaningful as soon as traders move beyond simple single-option positions into spread strategies and multi-leg structures with naturally offsetting risk. Supporting it is both a meaningful capital-efficiency benefit for traders and a meaningful technical requirement for the platform, which has to operate both pre-trade and post-trade, blocking new orders that would breach margin and triggering liquidation when existing positions move against the trader.
The interface problem
Options pose a UX challenge with no real precedent in CFD or futures trading, where the trading screen is essentially a chart with a price ladder next to it, and a few derived fields. An options interface has to render options chains, multi-leg strategies, Greeks, implied volatility surfaces, P&L profiles and screening tools, and it has to render them in a way that a trader without institutional options experience can actually use.
Kudinov’s ideal trading experience starts with strategy-level rather than leg-level order entry. “Instead of manually picking different puts and calls to construct a strategy, you simply say ‘my strategy is a straddle,’ and the interface switches to a mode that shows you the bid and ask for the straddle as a whole.”
The same principle extends to position visualisation: a P&L chart that shows how the position behaves under price and volatility moves, allowing the trader to “effectively emulate your position before placing it.” Screening sits on top of the same data infrastructure, with more than 100 data points – fundamentals, Greeks, put/call imbalances – available for real-time filtering.
Asked what single thing a prop firm should prioritise if it’s considering adding options, Kudinov returns to the interface.
“If a trader is taking their first steps in options, the GUI has to be either self-explanatory or supported by educational tools built into the platform. They need to be able to cross-reference the interface against what they’ve read online or asked an LLM about complex options trading, and navigate it easily.”
What comes next
Most retail prop firms still specialise in either FX and CFDs or in futures. Options offerings are still emerging. But the architectural direction of travel is towards convergence.
“In theory, you can imagine a platform that combines all those asset classes,” Kudinov says. “Same user experience, and the trader simply chooses the product they’re most comfortable with.”
Whether the sector reaches that destination is partly a question of regulatory complexity and partly one of trader demand. The more pressing question, for any prop firm taking the first step into options, is whether its current technology stack is built to support the move at all. The simulator, the data infrastructure, the risk system and the user interface all need to be options-capable from the ground up. And none of these is a feature that can be bolted on to a CFD platform.
The firms moving into options first, in other words, will be the ones whose technology choices were made with that destination already in mind.
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