Futures and Options (FnO) trading is all about making trades on price fluctuations of an underlying stock, commodities or indices that are expected to rise in future.
But one question is often asked, whether individuals can really start FnO trading themselves? This article seeks to answer this query in simple terms by explaining whether and how independent FnO trading is possible.
Can You Do Futures and Options (FnO) Trading on Your Own?
YES, you can start Futures and Options trading by yourself, but it requires thorough knowledge, understanding of the market, and access to the best FNO trading platforms.
There are several prerequisites that you should consider before starting FnO trading:
- Financial Knowledge: Understanding the bare minimum of financial markets, particularly futures plus options is vital. Terms like expiry, contracts, strike prices and others should be familiar to you.
- Willingness to bear risk: Trading in FnO carries substantial risks. Evaluate your capacity to withstand risks as well as possible losses
- Funds: To trade in FnO, you require large funds and have margin requirements. This may however vary depending on the broker or specific contract.
- Market research: Being updated with current market trends and news is important. It helps you make decisions that are based on concrete information.
Steps to Start FnO Trading
Before diving into FnO trading, it\’s crucial to choose a reliable broker regulated by SEBI. Among the many options available worldwide, Dhan trading platform stands out as a top choice.
Dhan provides a free demat account with no account opening or annual maintenance charges (AMC). Moreover, it offers complimentary trading for stocks (delivery), ETFs, and IPOs.
Here are the steps to start Futures and Options trading via Dhan:
1. Open a Dhan Account
To start trading F&O via Dhan, the first step is to open a Dhan account. This involves giving your personal details and going through Know Your Customer (KYC) formalities. The KYC process is basically based on standards that assist in confirming a person’s identity.
2. Activate F&O Segment
Once your account is set up, you can activate the F&O segment. This is typically found under the “Profile” section. Activating this segment allows you to trade in F&O.
3. Submit Income Proof
The third step in starting Futures and Options (F&O) trading via Dhan is submitting income proof. This is a mandatory requirement to start derivative trading. You can submit documents like your latest bank statement, IT return, or salary slip as proof of income. This step is crucial as it verifies your financial stability and readiness to engage in F&O trading.
4. Start Trading
Once your F&O segment is activated and your income proof is verified, you can begin trading. This involves choosing the right contracts based on your trading strategy, placing orders, and managing your portfolio. Remember, F&O trading requires continuous learning and staying updated with market trends for successful trading.
Conclusion
You can indeed start Futures and Options (F&O) trading by yourself. It’s a journey that begins with opening a Dhan account, activating the F&O segment, and submitting income proof. Once these steps are completed, you’re ready to dive into the world of F&O trading.
Remember, it’s a path filled with potential rewards, but it also comes with its share of risks. So, equip yourself with knowledge, stay updated with market trends, and trade wisely.