Ruben Abitbol, former Head of Trading and Risk at The5ers and most recently an executive at PropFirmMatch, has launched RUBIK, a consulting practice focused exclusively on risk management for proprietary trading firms.

The timing reflects mounting pressure on the prop trading sector, where between 80 and 100 firms shut down in 2024 alone. Abitbol believes most failures stem from poor cashflow management rather than malicious intent, with founders underestimating the lag between revenue generation and payout obligations.

“The revenue generated today will impact your payouts months later,” Abitbol explained in an interview with FinanceMagnates.com. “As long as the company grows, you don't feel it. But when growth stabilizes or drops, your payout obligations catch up, and suddenly, your margins vanish.”

Risk Management as a Service Model

RUBIK operates on a Risk Management as a Service (RMaaS) model, providing external expertise that most prop firms cannot afford to maintain in-house. The approach addresses what Abitbol describes as a critical gap in the industry, where very few firms have internalized risk management Risk Management One of the most common terms utilized by brokers, risk management refers to the practice of identifying potential risks in advance. Most commonly, this also involves the analysis of risk and the undertaking of precautionary steps to both mitigate and prevent for such risk.Such efforts are essential for brokers and venues in the finance industry, given the potential for fallout in the face of unforeseen events or crises. Given a more tightly regulated environment across nearly every asset class, One of the most common terms utilized by brokers, risk management refers to the practice of identifying potential risks in advance. Most commonly, this also involves the analysis of risk and the undertaking of precautionary steps to both mitigate and prevent for such risk.Such efforts are essential for brokers and venues in the finance industry, given the potential for fallout in the face of unforeseen events or crises. Given a more tightly regulated environment across nearly every asset class, Read this Term capabilities.

“Only the largest players do,” Abitbol said. “Smaller firms often try to handle it internally as part of operations, but that's a critical mistake.”

Unlike traditional finance sectors where standardized practices exist, prop trading operates without unified benchmarks or tools. Abitbol's service model allows firms to access sophisticated risk infrastructure without building entire departments, similar to how other financial services have moved toward outsourced or co-sourced operational functions.

Abitbol spent over five years developing risk methodologies at The5ers starting in 2021, when standardized practices didn't exist in the nascent prop trading space. Before that, he traded commodity options at Futures First, giving him a trader's perspective that he says differs from the brokerage-focused backgrounds common among prop firm executives.

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“I was in a fortunate position at The5ers, where I led risk during the very early stages of the industry, meaning nothing existed yet, and I had to build everything from scratch: defining what to measure, which metrics to monitor, and how to interpret them,” Abitbol said.

Although the service has only just launched officially, Abitbol says he is already working with more than a dozen companies at various stages of development, though he is not disclosing their names.

RUBIK’s Three-Stage Advisory Model

For pre-launch companies, Abitbol helps build infrastructure from scratch, including partner selection, challenge model design, pricing structures, and rule frameworks that form what he calls “the foundation of proper risk management in prop trading.”

For small firms that have launched but lack data or experience, he implements processes to improve sustainability. For larger operators, he provides external risk audits with industry benchmarking, offering what he describes as “a fresh, data-driven perspective” against industry standards.

The practice focuses primarily on program balance and trading activity risk through two layers: deep data analysis to build business intelligence infrastructure, and continuous trading flow management to flag high-risk or toxic behavior.

“My risk management approach for prop firms covers more than just trading and margins,” Abitbol said. “It also addresses technology risk, payments Payments One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl Read this Term risk like chargebacks, and PR risk from targeted attacks by groups.”

Margins Improve by Half After Implementation

Abitbol claims several clients have improved margins by over 50% after implementing his protocols. In one case, a small firm operating at a 50% payout ratio, which he describes as dangerously high for smaller operations, was brought down to a steady 25–30% after his intervention.

“They were growing, but with no margin buffer,” Abitbol added. “After I implemented my methodology, we brought the ratio down to a steady 25–30% yearly, effectively saving them from collapse.”

Industry data shows average payout ratios hover around 50%, consuming a massive portion of total expenses. As competition intensifies and firms lower prices while relaxing rules to attract traders, margins are being squeezed further. Abitbol notes that traders are also becoming more sophisticated in exploiting system weaknesses.

“Less than 1% of traders can bankrupt a firm if not identified and handled correctly,” he said. “Without advanced detection systems and consistent review, these flows can destroy the business from within.”

No Standard Risk Model Exists

Unlike the forex brokerage world, where regulations, established technologies, and decades of experience have created clear risk protocols, prop trading operates without standardized practices. Every firm defines risk differently, creating what Abitbol describes as both fascinating and chaotic conditions.

“In Forex, you have all the cards on the table,” he said. “Prop trading, on the other hand, is a completely new environment. There's no standard, no unified benchmark, and every firm defines risk differently.”

Abitbol's longer-term goal involves helping establish industry-wide benchmarks and standards. He notes that some technology providers are attempting to build risk engines for prop firms, but none are currently effective because they simply can't apply brokerage systems to asymmetric prop firm risk structures.

Early-Stage Mistakes Prove Costly

According to Abitbol, firms in growth mode often prioritize traffic generation over risk management, sometimes partnering with affiliates who bring in what he calls bad actors. Revenue initially grows, but months later margins collapse as the firm pays out twice what it earned to cover abuse-related damage.

“I call this the ‘smoke revenue’ effect: you end up paying twice what you earned to cover the damage caused by abusers,” Abitbol said. “When these firms start implementing proper risk measures, their revenue often drops because those bad actors stop coming, but that's a necessary correction.”

For mature firms, mistakes tend to be analytical, with companies misinterpreting cause-and-effect relationships in their data or underutilizing information altogether. The cashflow lag issue hits hardest when growth plateaus. Abitbol says the average trader requests a first payout roughly 2.5 months after registration.

“The number one reason for failure is misunderstanding cashflow lag,” he said. “I truly believe most of these founders had good intentions. They entered the industry thinking it was easy, that early growth meant long-term success, but they misread the economics.”

Regulation Could Strengthen Sector

Abitbol favors tighter regulation, arguing it would strengthen the space by allowing only sustainable operators to remain, benefiting both traders and firms.

“I'm in favor of regulation,” Abitbol said. “It will strengthen the space and allow only solid, sustainable players to remain, benefiting both traders and firms.”

He acknowledges that prop trading operates closer to gamified trading than traditional market activity, since it functions in a closed environment with defined rules rather than direct market exposure.

“But that's exactly why having a solid risk framework and potential regulatory oversight is so important,” he explained.

As regulatory pressure increases and consolidation continues, Abitbol expects Risk Management as a Service to shift from competitive advantage to survival necessity. He already uses standardized benchmarks to assess whether firms are operating sustainably or heading toward failure.

“In time, Risk Management as a Service won't just be an advantage, it will be a necessity for survival,” he concluded.