A prop firm is a company that lets traders trade a large account under fixed risk rules and pays them a share of the profit they make. For Indian traders, the idea is simple: instead of risking ₹10L of your own savings on NIFTY or BANKNIFTY options, you pay a one-time fee, prove you can trade within limits, and earn most of the profit on a much larger account.
That is the short answer to "what is a prop firm". The longer answer matters more, because the details decide whether a prop firm is a fair opportunity or an expensive lesson. This guide covers the prop firm meaning, how the business model works, the difference between evaluation and funded stages, what simulated capital really means, and how to judge any prop trading firm in India before you pay.
01Prop firm meaning: a clear definition
Prop firm is short for proprietary trading firm. Traditionally, a proprietary trading firm traded its own money through in-house traders and kept the profits. Traders were employees or partners, sat on a desk, and were given a capital allocation with strict loss limits.
The modern retail prop firm keeps the spirit of that model but opens it to anyone. You do not apply for a job. You buy an evaluation, often called a challenge. If you hit a profit target without breaking the loss limits, you graduate to a funded account and earn a profit split on what you make there.
Three elements define almost every modern prop firm:
- A defined account size, such as ₹5L, ₹10L, ₹25L or ₹50L.
- Risk rules, usually a daily loss limit and a maximum loss limit, measured in percentage terms.
- A profit split, where the trader keeps the larger share of eligible profit and the firm keeps the rest.
A prop firm does not pay you for being right once. It pays you for staying inside the rules long enough for your edge to show.
02How prop firms make money, and why the model exists
It is worth being direct about this, because it is the question most traders do not ask. A retail prop firm earns mainly from evaluation fees. Many traders buy evaluations. Some pass. Fewer go on to take regular payouts. The fee income from all evaluations pays for the platform, market data, support and the payouts to funded traders.
That can sound one-sided, so it helps to see why the model exists at all and why it can be fair.
Traders lack capital, not skill
Many capable Indian traders have a working method but only ₹50,000 or ₹1L to trade. On that size, even a good month barely moves their life. A prop firm separates skill from savings.
Rules cap the downside
The trader's worst case is the fee. The firm's worst case is limited by the daily and max loss floors. Both sides know their maximum risk before the first trade.
Good traders are good business
A firm with a fair rulebook wants consistent traders to succeed. Steady funded traders who are paid on time are what build a prop firm's reputation over years.
The model becomes unfair when rules are vague, change after you buy, or are designed to be tripped by normal trading. That is why the checklist at the end of this guide matters more than any discount code.
03Evaluation stage vs funded stage
Most prop firms split the journey into two stages. The evaluation tests whether you can make a target while respecting risk limits. The funded stage is where you earn payouts. The rules on loss limits usually stay the same; what changes is that profit now becomes money you can withdraw as a split.
The evaluation stage
In a two-step evaluation, Phase 1 asks for a larger target and Phase 2 a smaller one, both under the same loss limits. A one-step evaluation has a single, larger target with tighter limits. Some firms also offer instant funding, where there is no evaluation but the limits are stricter and the fee is higher. You can compare these formats in detail in our guide to 1-step vs 2-step challenges and instant funding.
The funded stage
Once funded, you trade the same way, but now you can request payouts on a regular cycle. Funded accounts often add payout-side rules, such as a consistency rule that stops one lucky day from making up most of your profit. At Greenwick these payout rules never close the account; they only delay or adjust a payout.
- Buy an evaluation
Choose a plan type and account size, and pay the one-time fee.
- Pass the target within the rules
Reach the profit target without touching the daily or max loss floor, and complete the minimum trading days.
- Trade the funded account
Keep trading under the same loss limits. Profit becomes eligible for payout.
- Request payouts and scale
Withdraw your share on each payout cycle and grow the account if you stay consistent.
04Simulated capital, explained honestly
This is the part many websites skip. At most modern retail prop firms, including Greenwick, the account you trade is a simulated account. The prices are live market prices from NSE, BSE and MCX. Your orders, fills and P&L behave like a real account. But the orders do not go to the exchange, and there is no ₹10L sitting in a demat account with your name on it.
So where does the payout come from? When you qualify, the firm pays you real money from its own funds. The amount is calculated from your simulated profit and your profit split. In other words, you are paid for performance on a realistic simulation, not for returns on money that was invested on your behalf.
Greenwick is not a broker and not an investment adviser. It does not hold your money for trading or execute orders on an exchange. Evaluations and funded accounts use simulated capital with live Indian market prices, and rewards are paid from Greenwick's own funds based on simulated performance. Trading involves risk, and the fee is money you can lose.
Is this a weakness? Not if it is stated plainly. It is what allows a firm to offer a ₹25L account for a fee of a few thousand rupees. The important thing is that the firm says it openly, publishes how payouts are calculated, and pays on time.
05Prop firm vs trading your own capital
The fairest way to compare a prop firm with your own capital is with rupees. Take a trader who makes a steady 5% in a good month and occasionally has a bad month of minus 6%.
| Scenario | Own capital ₹1,00,000 | Prop firm ₹10L 2-Step |
|---|---|---|
| Upfront cost | ₹1,00,000 of savings at risk | ₹10,999 founding fee |
| Good month, +5% | ₹5,000 profit, all yours | ₹50,000 simulated profit, ₹40,000 payout at 80% |
| Bad month, −6% | ₹6,000 real loss | No personal loss beyond the fee, provided floors are not touched |
| Worst case | Most or all of the ₹1,00,000 | The ₹10,999 fee |
| Rules | Your own, if any | 4% daily loss, 8% static max loss |
Assumes the founding fee, that all profit is eligible, and that the consistency rule is met. You must pass Phase 1 (8%) and Phase 2 (5%) first. Payouts may be taxable; consult a chartered accountant.
The prop route is not free money. You must first pass two phases, and many traders fail on the first attempt and pay again. You also give up 20% of profit and accept rules you did not write. But for a disciplined trader with limited savings, the arithmetic is hard to ignore: the same skill applied to ten times the capital, with a fixed and known worst case.
- Traders with a tested method but limited capital
- Those who already trade with stop losses
- People who want a fixed, known worst case
- Traders who benefit from external discipline
- Long-term investors holding for months
- Strategies that need wide, open-ended stops
- Traders who dislike any outside rules
- Those with ample capital and proven returns
06Who a prop firm suits, and who it does not
A prop firm works best for intraday and short-term traders who already think in terms of risk per trade. If you trade NIFTY or BANKNIFTY options with a defined stop, size positions to a fixed rupee risk, and stop for the day after a set loss, the rules will feel familiar. Our guide to risk management for funded traders shows how to fit position size inside a daily limit.
It is a poor fit in a few clear cases:
- Complete beginners. If you have not yet traded through a losing streak, the evaluation will mostly teach you that lesson at a price.
- Traders who average down. Adding to losers is the fastest way to touch a daily loss floor.
- People treating the fee as a lottery ticket. Buying evaluation after evaluation without changing anything is just a slower way to lose money.
- Anyone who needs the payout to pay bills next month. Pressure changes how you trade, and the rules punish pressure.
If you recognise yourself in that list, read why traders fail prop challenges before buying anything. Honesty here saves money.
07How Greenwick Funded works
Greenwick is a prop trading firm for the Indian stock market. You trade NSE index options and futures (NIFTY, BANKNIFTY, FINNIFTY, MIDCPNIFTY), NSE stocks in cash intraday, futures and options, BSE's SENSEX and BANKEX, and MCX's GOLD, SILVER, CRUDEOIL and NATURALGAS, all on live prices during IST market hours.
| Plan | Target | Daily loss | Max loss | Profit split |
|---|---|---|---|---|
| 2-Step | 8%, then 5% | 4% | 8% static | 80% rising to 90% |
| 1-Step | 10% | 3% | 6% static | 80% rising to 90% |
| Instant | None, funded day one | 2% | 5% trailing, locks at start balance | 70% rising to 80% |
Account sizes are ₹5L, ₹10L, ₹25L and ₹50L, with no ₹50L Instant account. There is no time limit on any plan, and the 2-Step and 1-Step need at least five trading days per phase. Full fees, including founding prices for the first 500 traders, are on the pricing page.
A few rules define how Greenwick feels in practice:
- Loss limits are on equity. Open P&L counts. Touching a floor at any moment closes the account.
- The daily floor resets at 09:15 IST from the previous day's closing balance. On a ₹10L 2-Step, if yesterday closed at ₹10,30,000, today's floor is ₹9,90,000.
- Only five hard rules close an account. Everything else, including consistency, the news window and the expiry-day window, only affects payouts.
- Payouts are reviewed within 24 hours and sent the same day by UPI or IMPS/NEFT, with the UTR on your dashboard and WhatsApp.
The complete list of hard and payout rules is in the Greenwick rulebook, and the prop firm FAQ answers the most common questions plan by plan.
08How to choose a good prop firm: a checklist
Whether you choose Greenwick or not, judge every prop trading firm in India on the same points. A low fee means little if the rules are vague.
- Transparency about simulated capital
The firm should say clearly whether accounts are simulated, who pays payouts, and that it is not a broker or adviser. If this is hidden, ask why.
- Static vs trailing floors
Check whether the max loss floor is static or trailing. A static floor gives you more room as you build profit. A trailing floor keeps the buffer tight. Know which you are buying. Our drawdown guide walks through both with rupee examples.
- Equity or balance
Find out whether limits are measured on equity, including open positions, or only on closed balance. Equity-based limits are stricter and you must size for them.
- Payout speed and method
Look for a stated review time, a stated payment method such as UPI or IMPS, and proof of transfer such as a UTR number.
- A published rulebook
Every rule that can close an account should be written down before you pay. Rules that appear only after a breach are a warning sign.
- Rule-change policy
Ask what happens if rules change. The fair answer is that changes apply only to new accounts and your account keeps the rules you bought.
Before paying, try to answer three questions from the firm's own website: what closes my account, when can I withdraw, and what happens if the rules change. If you cannot, keep looking.
A prop firm is a tool. Used with discipline, it lets a skilled trader apply the same method to a much larger account with a known worst case. Used carelessly, it is a recurring fee. If you are ready to take the next step, read how to pass a prop firm challenge, then decide which plan fits the way you already trade.