If you trade with a prop firm, you've likely come across rules around permitted trading hours and position cutoff times. One of the most discussed is the 5PM rule. Here's what it means, why it exists, and what Take Profit Trader just updated.
What Is the Prop Firm 5PM Rule?
The 5PM rule refers to a cutoff time enforced by most futures prop trading firms at 5:00 PM Eastern Time. Most firms require traders to be flat at this time, meaning no open positions.
The reason comes down to how futures markets are structured. The CME runs nearly 23 hours a day, closing at 5:00 PM EST (4:00 PM CT) and reopening at 6:00 PM EST (5:00 PM CT) for a one-hour daily maintenance break. During this window, the exchange processes end-of-day settlements, margin calculations, and system maintenance. No orders can be placed or executed. Prop firms set the 5:00 PM cutoff to ensure traders are flat before the market closes for that break. This schedule applies to most CME products, though some instruments trade on different hours and may close earlier in the session.
What Happened If You Held Past the Cutoff Time?
Historically, the 5PM cutoff was treated as a hard rule across the prop trading industry. Holding an open position past the permitted time was considered a rule violation, and the standard consequence was automatic liquidation and a failed account.
Over time, a number of prop firms began handling this differently. Rather than treating an open position at cutoff as a violation, these firms introduced systems that automatically close the position on the trader's behalf, with no impact on account status. The position closes, and the trader returns the following session.
What Take Profit Trader Just Changed
Starting today, TPT has updated how the 5PM rule is handled.
Instead of auto-liquidation and a failed account, TPT will now automatically close your open position at 4:55 PM EST. The account won’t fail automatically and your progress won’t be lost. The account stays active and you can continue trading the following session.
Here's the difference:
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Previously |
Update |
|---|---|
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Holding an open position past 5:00 PM EST resulted in automatic liquidation and a failed account |
TPT automatically closes your open position at 4:55 PM EST No automatic failed account Account stays active Continue trading the following session |
Which Accounts Does This Apply To?
This applies to all accounts on both Tradovate and Rithmic: Tradovate accounts have been updated automatically. For Rithmic, this applies to new accounts created today (May 6th) from 6AM EST onwards.
Two Exceptions to Be Aware Of
The 4:55 PM EST auto-close applies to products that follow the standard CME trading window. There are two scenarios where it does not apply.
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Product-Specific Hours: Some instruments on the CME close before 5:00 PM Eastern. If the market for your product closes before the standard cutoff and you have not exited your position, the account will be liquidated.
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Holiday Schedule: Market hours can change on exchange holidays. It is the trader's responsibility to monitor holiday-adjusted schedules. Missing a holiday-adjusted close time will result in account liquidation.
Why This Matters
The position closes at the end of the session either way. What changes is what happens to your account. Under the updated rule, an open position at the cutoff is handled automatically, your account stays active, and you continue trading the following session with no interruption.
For traders focused on building consistency, one less variable at the end of the trading day makes a difference.
Got questions about how this applies to your account?
Reach out to our 24-hour live support team.