Education
What happens to Papaya One drawdown after a payout?
For Papaya One accounts subject to lock upon payout, the maximum drawdown threshold locks at the account's initial balance after a payout. On a $100,000 account, that threshold becomes $100,000.
The profits you retain above that level become your remaining trading buffer. If you withdraw all profits and leave the account at its initial balance, no buffer remains and the account is lost under this rule.
An optional add-on costing 25% of the challenge price removes the lock-upon-payout rule.
What Does “Lock Upon Payout” Mean?
Lock upon payout changes the account's maximum loss threshold when a payout occurs. For a $100,000 account:
- The initial balance is $100,000.
- After a payout, the maximum loss threshold locks at $100,000.
- The amount remaining above $100,000 provides room for future trading losses.
“Breakeven” refers to the account's initial balance. It does not refer to your personal break-even point after challenge fees or other expenses.
It is also important to distinguish the drawdown threshold from the remaining drawdown buffer. The threshold is the fixed account level. The buffer is the distance between your post-payout account balance and that level. This is not a non-withdrawable buffer: you choose how much profit stays in the account.
Why Does Drawdown Lock at the Initial Balance?
Under the lock-upon-payout rule, the starting balance becomes the account's loss floor after a withdrawal. The account can continue operating using the profit cushion retained above that floor.
This makes the payout decision part of your risk management: the amount removed determines how much room remains for future losses. A larger withdrawal leaves a smaller trading buffer. A smaller withdrawal retains more room inside the account.
Example: A $100,000 Account Grows to $106,000
Suppose your Papaya One account starts at $100,000 and grows to $106,000. You choose a payout that removes $4,000 from the trading account, leaving $102,000.
| Account detail | Amount |
|---|---|
| Initial balance | $100,000 |
| Balance before payout | $106,000 |
| Amount removed from the account | $4,000 |
| Balance after payout | $102,000 |
| Locked drawdown threshold | $100,000 |
| Remaining trading buffer | $2,000 |
Remaining buffer = Post-payout balance − Locked drawdown threshold
$102,000 − $100,000 = $2,000
You can continue trading with a $2,000 buffer above the locked threshold, subject to the account's other rules. In this example, $4,000 means the amount deducted from the trading account. Your net payment depends on the applicable account gains and any payout charges. The example assumes the withdrawal meets the program's payout eligibility requirements.
What Happens If You Withdraw All Your Profits?
If the full $6,000 is removed from the $106,000 account, the remaining balance becomes $100,000. The drawdown threshold is also $100,000, so the remaining buffer is zero.
Under the lock-upon-payout rule, withdrawing all profits and leaving no buffer results in losing the account. To trade again, you would need to purchase a new account.
How Much Buffer Can You Leave After a Payout?
The trader chooses how much profit to retain, within the applicable payout rules. The following examples show how different account deductions affect the same $106,000 balance:
| Amount removed | Balance after payout | Buffer above $100,000 |
|---|---|---|
| $2,000 | $104,000 | $4,000 |
| $3,000 | $103,000 | $3,000 |
| $4,000 | $102,000 | $2,000 |
| $5,000 | $101,000 | $1,000 |
| $6,000 | $100,000 | $0 — account lost |
These are illustrations of the buffer calculation, not confirmation that every listed withdrawal is eligible under every program. There is no single retained amount that suits every strategy. Consider your usual planned loss per trade, combined open exposure, and the account's other loss limits before choosing a payout amount.
Why Your Trade Size Matters After a Payout
A payout reduces the balance available above the locked threshold. With a post-payout balance of $102,000 and a locked threshold of $100,000:
- Risking 1% of the balance means risking $1,020.
- That represents 51% of the remaining $2,000 buffer.
- Risking 0.5% means risking $510, or 25.5% of the buffer.
These figures exclude trading costs and slippage. A risk percentage that looks small relative to the balance can be substantial relative to the amount you are still allowed to lose. Recalculate after each payout. See our guide to prop firm risk management.
Can You Remove the Lock-Upon-Payout Rule?
Yes. The optional add-on removes the lock-upon-payout rule and costs 25% of the challenge price. For example, if the applicable challenge price is $200: Add-on cost = $200 × 25% = $50.
The percentage applies to the challenge price — not the account size, profits or payout amount. Removing this rule does not remove every other account condition. Review the applicable drawdown and payout terms before choosing your withdrawal amount.
What to Check Before Requesting a Payout
- Confirm whether your account is subject to lock upon payout.
- Check how much will be deducted from the trading balance.
- Calculate the balance that will remain after the payout.
- Subtract the initial balance to find the remaining buffer.
- Review whether your planned trade sizes fit that buffer.
- Confirm the payout meets the program's other requirements (payouts explained).
If you want to continue trading on the same account, your payout decision needs to leave room for future losses.
Frequently Asked Questions
What is the Papaya One drawdown threshold after a payout?
For accounts subject to lock upon payout, the maximum drawdown threshold locks at the initial balance. On a $100,000 account, the threshold is $100,000.
Does a $100,000 threshold mean I have $100,000 available to lose?
No. The threshold is the account's loss floor. If your post-payout balance is $102,000, your remaining buffer above that floor is $2,000.
Can I withdraw all profits and keep trading on the same account?
Not under the lock-upon-payout rule if the withdrawal leaves no buffer. Removing all profits brings the balance back to the locked threshold, and the account is lost.
Who decides how much buffer remains?
The trader chooses how much profit to retain when selecting the payout amount, subject to the program's withdrawal requirements.
How much does the add-on cost?
The add-on that removes lock upon payout costs 25% of the challenge price. For a $200 challenge, that equals $50.
Does the add-on remove all drawdown limits?
No. It removes the lock-upon-payout rule. Other applicable account limits and payout conditions still need to be followed.
Before requesting a Papaya One payout, calculate both the amount you want to withdraw and the buffer you want to retain. On a $100,000 account subject to lock upon payout, the post-payout threshold is $100,000; every dollar retained above it adds to your trading buffer. Review the Papaya Funding trading rules before requesting a payout or choosing the add-on.
Trading involves risk. Accounts use simulated capital. The examples are hypothetical and educational. Results and payouts are not guaranteed.