Derivatives are most commonly traded as CFDs (Contracts for Difference) on underlying Commodities, Indices, ETFs (Exchange-Traded Funds), Stocks, Bonds, Currencies (Forex) and Digital Assets - all of these can be considered as derivatives. Basically, a derivative is a financial instrument that derives its value from an underlying asset or group of assets, as listed. An ETF is itself a derivative instrument in that it is a type of investment fund that tracks the performance of an underlying index, commodity, or group of assets. When you invest in an ETF, you are essentially buying a share in the fund, which gives you exposure to the underlying assets. The value of the ETF is determined by the value of the underlying assets. CFDs are contracts between a buyer and a seller, where the buyer agrees to pay the seller the difference between the current value of an asset and its value at the time the contract is closed. CFDs are often used for trading purposes, as they allow traders to take advantage of price movements in the underlying assets without actually owning them. In summary, CFDs are considered derivatives because they derive their value from underlying assets. However, they are different types of derivatives with different characteristics and uses.

MT4/5 are both very advanced Trading Platforms that are provided by MetaQuotes to licenced brokers around the world. The coding language used by MT4 is different to that which is used by MT5 and as such, Electronic Advisors (EAs) that work in MT4 are NOT interchangeable with MT5 a(and vice-versa). There are many other Trading Platforms available that are provided by other software development companies, other than MetaQuotes, but with regards to algorithmic and automated trading, none of these come even remotely close to MT4/5 in capability!

MetaQuotes (the provider of MT4/5) are by far the largest and most established provider of trading platforms to Brokers, especially those that offer derivative products upon which most Prop Firms are based. The nature of Prop Firms currently (usually) places them outside of the scope of most Financial Regulatory bodies around the world - however, this view is very rapidly changing especially given the huge success and growing adoption of Funded Trading through Prop Firms by traders everywhere. In 2023, there was a landmark decision by the CFTC in the USA to shutter and prosecute My Forex Funds (MFF) which was one of the most successful Prop Firms at the time, citing a number of reasons, but most prominently the fact that they (and many other Props) were operating without being subject to Financial Regulation for the products that they offer, notably in the USA - this court case is not yet concluded and it would therefore be wrong (in our opinion) to premise any guilt on MFF or anyone else, however this ruling clearly sparked MetaQuotes to improve their own level of professionalism and immediately demand of all their associated Brokers that their products could only be offered to clients where such offering meets any financial regulatory requirements in the countries where it is offered. In short, what this has meant for the Prop industry (which may change over time) is : (1) Any Prop Fund that directly targets USA clients is very unlikely to be able to offer either MT4/5; (2) Only Broker-backed (appropriately Regulated) Props that do not directly target US traders (or are able to separate their offerings to them) are likely to be able to offer MT4/5. *This is a changing landscape and the above FAQ response will have to adapt over time, but most importantly, we view these changes as hugely beneficial to the future of both the Prop industry and Traders alike.