The brokerage house will provide qualified traders access to a "virtual" fund worth up to $500,000 and will split up to 75% of the earnings.

With the launch of OANDA Labs Trader, OANDA, a well-known name in the FX and CFDs brokerage business, has entered the world of proprietary trading. The broker would give the traders up to 75 percent of the earnings, as stated on Monday.

Even though OANDA is subject to numerous regulatory bodies, British Virgin Islands regulators have given their approval for its Global Markets division, which will offer its proprietary trading services to clients who register there.

"This program empowers the most proficient traders with seamless access to global financial markets across a variety of asset classes," said Kurt von Scheidt, OANDA's Chief Operating Officer.

As with other proprietary trading platforms, OANDA traders must pass an assessment exam in order to trade. According to information on its website, the challenge's starting cost varies from $249 to $2,400. The grant amount varies depending on the challenge tier; it might range from $25,000 to $500,000.

Traders are expected to reach a profit target of 5% in Phase 2 and 10% in Phase 1 for all tasks. Additionally, there is a maximum drawdown of 10% and a daily loss cap of 5%.

Kurt von Scheidt went on: "Traders will be equipped with necessary resources, including educational content and unique data-driven features and widgets, to facilitate successful trading, in addition to the share they can earn from their profitable trading of virtual funds."

In describing its business plan, OANDA stated that the experienced traders on the in-house trading platform will essentially serve as signal suppliers. OANDA's proprietary trading models will use the signals generated by these traders, along with additional input variables, to inform its decisions regarding market positioning.

It also made clear that even though the money in the OANDA Labs Trader account is virtual, the actual market positions that would be taken based on the traders' signals do put the company's own capital at risk. Additionally, OANDA stated unequivocally that it will pay traders for all trades, even those that involve virtual capital.

Nevertheless, considering the low success rate of these challenges, it's important to keep in mind that challenge fees account for a sizable amount of the revenue for the majority of prop trading platforms.

OANDA entered the prop trading space during a period of high demand for its products. In recent months, a large number of other brokers have also started prop trading companies. Certain brokerages have even discreetly marketed their services, avoiding the term "prop trading" due to the controversy surrounding the business model.