{"status":"ok","message-type":"work","message-version":"1.0.0","message":{"indexed":{"date-parts":[[2026,8,5]],"date-time":"2026-08-05T09:48:57Z","timestamp":1785923337237,"version":"3.56.0"},"posted":{"date-parts":[[2026]]},"group-title":"SSRN","reference-count":0,"publisher":"Elsevier BV","license":[{"start":{"date-parts":[[2026,1,1]],"date-time":"2026-01-01T00:00:00Z","timestamp":1767225600000},"content-version":"unspecified","delay-in-days":0,"URL":"https:\/\/www.uspto.gov\/ip-policy\/copyright-policy\/copyright-basics"}],"content-domain":{"domain":[],"crossmark-restriction":false},"short-container-title":[],"abstract":"<jats:p>Retail proprietary trading firms sell evaluation contracts (\"challenges\"): a buyer pays a fee to trade a simulated account and share in future simulated profits, without disclosure of the probabilities that determine the contract's value. I price the standard two-step challenge as a contingent claim. Trader equity follows arithmetic Brownian motion; the challenge is a first-passage problem priced by Monte Carlo simulation, including funded-stage profit sweeps and the customary fee refund. Three findings emerge. The apparently symmetric rules embed a large time-limit edge: a zero-edge trader passes the frictionless benchmark with probability 0.50 but the baseline contract with probability 0.30. Contract value concentrates on a narrow risk-sizing ridge near 2 per cent daily volatility, which the product's marketing never discloses. Under an illustrative baseline population with transaction cost drag, the model-implied average value of a USD 500 challenge is USD 221, implying a 56 per cent gross margin for the firm, with 7.5 per cent of simulated buyers reaching funded status. I propose standardised disclosure, comprising a cohort funnel, a payout ratio and a conditional median payout, modelled on CFD loss-rate and gaming-machine return-to-player regimes.<\/jats:p>","DOI":"10.2139\/ssrn.7178078","type":"posted-content","created":{"date-parts":[[2026,8,5]],"date-time":"2026-08-05T09:41:53Z","timestamp":1785922913000},"source":"Crossref","is-referenced-by-count":0,"title":["The Price of a Funded Account: An Actuarial Analysis of Proprietary Trading Firm Challenges"],"prefix":"10.2139","author":[{"ORCID":"https:\/\/orcid.org\/0009-0005-8477-9393","authenticated-orcid":true,"given":"Boon Chuan","family":"Lim","sequence":"first","affiliation":[],"role":[{"vocabulary":"crossref","role":"author"}]}],"member":"78","container-title":[],"original-title":[],"deposited":{"date-parts":[[2026,8,5]],"date-time":"2026-08-05T09:41:53Z","timestamp":1785922913000},"score":1,"resource":{"primary":{"URL":"https:\/\/www.ssrn.com\/abstract=7178078"}},"subtitle":[],"short-title":[],"issued":{"date-parts":[[2026]]},"references-count":0,"URL":"https:\/\/doi.org\/10.2139\/ssrn.7178078","relation":{},"subject":[],"published":{"date-parts":[[2026]]},"subtype":"preprint"}}