Once people are familiar with normal trading, the next thing they want to try is F&O trading. However, the F & O segment is quite difficult and you must learn it properly before starting trading in this section. However, once you decide to enter in F&o trading, First question that comes to your mind is how to activate f and o in zerodha?
We will discuss all the details regarding it’s activation but first let’s talk about What is F&O trading, Future and Option?
What is F&O trading?
Futures and options have the benefit of being openly traded on different exchanges. On stock markets, for example, you can trade stock futures and options, commodities on commodity exchanges, and many more.
When studying regarding F&O trading, it’s important to keep in mind that you can do so without owning the actual asset.
If you might not be confident in buying gold directly, you may still gain from market volatility by trading in gold futures and options. You’ll need a lot less funds, to gain from these price volatility.
What is Future?
The futures contract is one form of derivative. A buyer (or seller) agreed to purchase (or sell) a particular portion of a specified commodity at an unique cost at a future date in this form of contract.
Let’s use an instance to demonstrate this. Assume you’ve purchased a futures contract to purchase 200 stocks of Xyz Company at Rs 60 per stock on a particular date. Regardless of the current market price, you will receive those stocks at Rs 60 when the contract expires.
Even if the price rises to Rs 70, you will still be able to buy the stocks for Rs 60 each, resulting in a profit of Rs 2,000. You’ll still have to acquire them at Rs 60 each if the stock price drops to Rs 50.
If this is the case, you will lose Rs 2,000! Futures are available on a variety of assets, not just shares.
Futures contracts are available for agricultural products, petroleum, gold, and currency, among other things. Futures are extremely useful in reducing the chance of price volatility.
What is Option?
The options contract is another type of derivative. This differs from a futures contract in that it offers a buyer (or seller) the right, but not the responsibility, to buy (or sell) a certain commodity at a predefined cost on a specific timeline. The call option and the put option are the 2 forms of options.
A call option is a contract that offers the investor the privilege but not the duty, to purchase a specific asset at a certain price on a certain date.
Let’s say you bought a call option to buy 200 stocks of Xyz Company at Rs 60 per stock on a specific date. However, the stock price drops to Rs 50 below the expiry period’s end, and you have no confidence in completing the contract because you will lose money. You then have the option of declining to purchase the stocks at Rs 60.
As a result, rather than losing Rs 2,000 on the offer, you will just lose the fee you paid to join into the contract which will be significantly less.
The put option is another form of option. You can sell assets at a negotiated rate in the future under this form of contract, but you are not obligated to do so.
For example, if you have a put option to sell 200 stocks of Xyz Company at Rs 60 at a later date and the stock price rises to Rs 70 before the expiry date, you can choose not to sell the stock at Rs 60.
As a result, you would have secured Rs 2,000. Now let’s Talk about How to Activate F&O in Zerodha?
by clicking here you can start Your request to F&O activated in your account. By posting your income proofs you can activate equity and currency derivatives.
Process of Activation
- After Clicking on The above links it will open a window of segments in your Console
- It will show you the segments which are not activated. You can just choose which one you want to activate.
- Upload the income proof.
- After uploading just click on the submit button.
Or if you have Account with Zerodha for more than 1 Year then you can activate it without Income Proof. Here is the process for that.
- The screen will appear as below after clicking on the above link
- Once you Click on active the screen will appear as shown in the below Image.
You can just click on Segments which you wish to activate and select the income range and you can summit the request.
Income range should be as per your earnings what you have earned from Zerodha on the minimum side.
Either of the following documents will qualify as evidence of income:
- Previous six months’ bank account statement
- The most recent pay slip
- ITR acknowledgment copy
- In the situation of salary income, a copy of Form 16 is required.
- A net worth document is valid
- Demat assets statement
Keep in mind that the proof must include the authority’s logo/seal. The F&O section will be enabled 48 hours after the request is received.
NRI Account Holders
The mentioned method is valid for both resident and company accounts (Corporate, Partnership account/LLP, etc.). However, If you have an NRI account, you must print and fill out the segment addition document and submit it to their headquarters along with your proof of income.
It is all from our side about how to activate F and O in zerodha? However, Please ensure you have basic knowledge regarding F&O before activating this segment.
We hope we are able to explain the process of how to activate F and O in zerodha? Let us know your views in the comment section.
Other Interesting blogs related to how to activate F and O in zerodha?
how to activate F and O in zerodha without income proof?
Please go though this blog we explained the process to for it.
how to activate commodity segment in zerodha?
Just Click on the links given in the blog to submit the request for commodity segment.
How to deactivate F&O in Zerodha?
You just need to raise a ticket on Zerodha Website to Deactivate the F&O in Zerodha.
What is f&o in zerodha?
F&O is Future and option which is a separate segment on most of the exchanges in India.
How old account should be to activate F&O in Zerodha without income proof?
Your account must be 1 Financial year old to activate F&O in Zerodha without Income proof.
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