A-Book vs. B-Book: How to Build a Sustainable Prop Firm

Prop firms operate by offering traders live accounts after passing demo challenges. Managing these accounts requires a decision: A-Book or B-Book? Let’s explore how each model works and why a hybrid approach is the key to long-term success.

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How A-Book and B-Book Models Operate

1. B-Book:
2. The firm is the counterparty for live trades.
3. Profits are paid from reserves, creating financial risk.
4. Losses don’t affect real market funds.
5. A-Book:
6. Trades go to the real market, aligning profits with market performance.
7. Losses are real, impacting the firm’s funds.
8. More stable but requires real capital.

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Why a Hybrid Model is the Best Choice

1. Combines A-Book stability with B-Book profitability.
2. Uses A-Book for high-value, unpredictable trades.
3. Retains B-Book for smaller, predictable outcomes.

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Avoiding Financial Collapse

Without A-Book capabilities, firms relying solely on B-Book face high risks of collapse when payouts exceed reserves.

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Conclusion:

Balancing A-Book and B-Book is essential for a sustainable prop firm. Let Amun Consulting help you implement the right hybrid model to secure your operations and ensure profitability.

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