FCA Spread Betting Regulation

If you trade CFDs or spread bets, the other side of your trade is your broker.
If you trade prop, the other side is the prop firm.

Different setups. Same idea.

With a broker, you put your own money in and trade with leverage.
With prop, you buy a challenge, pass it, get funded, and any profits you leave sitting there (minus the split) are effectively yours.

This isn’t a “broker vs prop” debate.

It’s just about knowing where your money actually lives, where the risk lies, and ideas to manage it.

Brokers

If your broker is FCA regulated in the UK, they’re part of the FSCS.
That means if the firm goes under and can’t return client funds, you’re covered up to £85k per person.

In normal English:

• The government’s got your back… up to £85k.
• Above that, you’re rolling your own dice.

So how do you manage that?

• Consider having a second broker (useful for loads of reasons)
• Consider an account in your spouse’s name if that’s appropriate
• Consider skimming profits regularly instead of letting the balance get silly

You don’t need zero risk.
You just don’t want avoidable risk.

Alright, what about prop?

Most prop firms aren’t regulated in the same way. If something goes wrong and they can’t pay, there’s no safety net.

Sounds scary… but only if you’re profitable. (But that’s the whole point of prop, right?!)

So similar logic applies:

• Stick to reputable firms
• Consider taking payouts regularly
• Consider splitting your risk across more than one firm

Don’t build a monster account in one place and hope for the best.

None of this is doom and gloom.
But with the recent news about prop firm Funding Ticks going under, I wanted to address it at least…

Risk is everywhere; just be smart, take sensible steps to manage it, or don’t play.

This episode on How do brokers and prop firms make money? might be a useful refresher if you’re working out which is best.