Prop trading and hedge funds are both active investment approaches, but they differ in purpose, structure, and strategy. Proprietary trading (prop trading) involves firms or individual traders using their own capital to trade stocks, forex, options , or other financial instruments for direct profit. In contrast, hedge funds pool money from outside investors and manage it on their behalf, charging management and performance fees.

While prop trading is focused on short-term market opportunities and high-frequency strategies, hedge funds often take a broader, long-term approach with diverse strategies such as long/short equity, global macro, or event-driven plays. Understanding these differences helps investors and traders decide which path aligns better with their goals, risk tolerance, a

See Full Page