INVESTING IN DERIVATIVES DOS and DON’TS

INVESTING IN DERIVATIVES DOS and DON’TS

INVESTING IN DERIVATIVES DOS

!! Go through all rules, regulations, bye-laws and disclosures made by

the exchanges.

!! Trade only through – Trading Member (TM) registered with SEBI or

authorized person of TM registered with the exchange.

!! While dealing with an authorized person, ensure that the contract note

has been issued by the Trading Member of the authorized person only.

!! While dealing with an authorized person, pay the

brokerage / payments / margins etc. to the Trading Member only.

!! Ensure that for every executed trade you receive duly signed contract

note from your Trading Member highlighting the details of the trade along with your unique client-id.

!! Obtain receipt for collateral deposited with Trading Member 

towards margin.

!! Go through details of Client-Trading Member Agreement.

!! Know your rights and duties vis-à-vis those of Trading Member.

!! Be aware of the risk associated with your positions in the market and

margin calls on them.

!! Collect / pay mark to market margins on your futures position on a daily

basis from / to your Trading member.

INVESTING IN DERIVATIVES DON’TS

&&  Do not start trading before reading and understanding the Risk

Disclosure Documents.

&& Do not trade on any product without knowing the risk & rewards

associated with it.

Src: SEBI 

Share: