Educate yourself<\/h1>\r\n\r\n\r\n\r\n

Begin by grasping the fundamentals of futures and options trading, including terms like strike price, expiration date, and premium.<\/p>\r\n\r\n\r\n\r\n

a) Futures contracts: These involve a binding agreement to buy or sell an asset (stock, currency, commodity, etc.) at a predetermined price on a specific future date.<\/p>\r\n\r\n\r\n\r\n

b) Option contracts: These are standardized and regulated financial securities that give the buyer the right (but not the obligation) to buy or sell an underlying asset at a specific price on or before a certain date.

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Open an account<\/h2>\r\n\r\n\r\n\r\n

A regular demat account won’t suffice; you’ll need a broker offering F&O trading facilities and approval based on a risk tolerance assessment to comprehend potential consequences.<\/p>\r\n\r\n\r\n\r\n

Understand margin requirements<\/h2>\r\n\r\n\r\n\r\n

In futures and options, you only need to pay a fraction of the contract value known as margin. For instance, if the Nifty is trading at 22,800 with a lot size of 50, the contract value would be 11,40,000, but the actual margin required may be only 1,30,091 INR.<\/p>\r\n\r\n\r\n\r\n

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