Can I trade in F&O directly if I have a DEMAT Account?
Yes, you will be able to engage in F&O trading directly if you have a DEMAT Account. The account will be used to store your stock derivatives physically.
How do I activate the F&O segment in my Demat Account?
Begin by uploading your bank statements as proof of income. Once you do that, you will come across the verification process. Enter the required OTP to complete it.
How do you select the right strike for trading options?
It involves checking your risk appetite and understanding how much capital you can allocate to the investment. Also, remember to consider the timeframe of your investment to pick the right strike price.
What is the margin required to trade in options?
The margin required to trade options varies with the kind of position you hold. For instance, selling options usually require a higher margin than buying. Exchanges and brokers provide detailed margin calculators for specific requirements.
Can I trade in F&O for Sensex and Bankex?
Yes, both are available for trading in India under the F&O segment. You will be able to primarily trade them through the Bombay Stock Exchange (BSE).
Can I trade in F&O on an intraday basis?
Yes, you can trade Futures and Options (F&O) on an intraday basis. This is common among traders who seek to profit from short-term price movements.
What is the square of time for intraday F&O trades?
The square of time is a term for using cycles of time or timing analysis in trading to predict the possible reversal of trends in the market. In intraday F&O trades, this involves finding out at what specific times price movements are likely to reverse or continue based on historical patterns.
What does OI mean?
OI refers to the open interest in the options market, which means outstanding or open contracts in both calls and puts. It can be taken as the level of activity and the liquidity of an option or futures contract. Increasing OI means new contracts are being formed, and decreasing OI means contracts are being liquidated.
What are the charges for trading in F&O?
Trading in F&O invites exchange transaction fees, SEBI turnover charges, and stamp duty. You also need to pay brokerage, which varies substantially across different broking houses.
What are the benefits of trading in Options?
Trading in options provides several benefits, including the following:
- Leverage: Permits you to control a larger position with a smaller amount of capital.
- Risk Management: Option contracts can be employed to hedge existing positions.
- Flexibility: Offers various strategic possibilities, from simple calls and puts to complex combinations like spreads and straddles.
- Profit Potential: Offers high potential returns with defined risk for buyers.
- Limited Losses: For buyers, the maximum loss is limited to the premium paid.
What is the margin required to trade in Nifty futures?
It involves the initial margin and exposure margin. The value varies according to conditions in the market. Usually, the initial margin is 10-15% of the contract price.
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