Floating Risk
The open loss you are carrying, before you close anything
The prop rulesIntermediate
Floating risk caps the combined unrealized loss across your open positions — the part you have not closed yet. The base is your settled balance, equity minus open floating PnL, and crossing that floor is a breach.
Because the base is settled balance, the allowance grows as you bank real profit: the more you realise, the more float you are allowed to carry. Most breaches on this rule happen while the trader is still thinking "but I haven't closed anything".