F&O (Futures & Options) is the most lucrative AND most dangerous segment. SEBI data: 90% retail F&O traders lose money. If you still want in, pick the right broker.
Before You Start - Warning
SEBI 2024 study: Between 2021-2024, 90% of retail F&O traders lost money, with average loss Rs.1.1 Lakh per year. If you cannot afford to lose, do not trade F&O.
What Matters in F&O Broker
- Low brokerage - you trade frequently
- Stable execution - every ms matters
- Margin offered - SEBI-compliant span + exposure margins
- Order types - Bracket, Cover, GTT
- Option chain with Greeks
Zerodha for F&O
- Brokerage: Rs.20 flat per executed order
- Option chain with IV, Greeks, OI
- Basket orders for iron condor, straddle etc.
- Sensibull integration for strategy builder
- Kite Connect API for algo trading
- 5x intraday leverage on index futures
F&O Account Activation
SEBI mandates income proof for F&O segment:
- ITR (last 6 months)
- Salary slip
- Bank statement showing income
Brokerage Example - F&O
1 lot Nifty options, Rs.500 premium:
- Value: Rs.500 x 75 = Rs.37,500
- Brokerage: Rs.20 (each leg)
- STT on sell options: Rs.23
- Exchange + stamp + GST: ~Rs.5
- Total per trade: ~Rs.68
Risk Management Rules
- Never risk >2% capital per trade
- Always use stop-loss
- Size position based on SL distance
- No revenge trading
- Journal every trade
Alternatives to F&O
If high-return seeking, consider: small-cap mutual funds, momentum stocks, direct equity investing. Lower skill bar, better risk-adjusted returns for most.
Ready to open F&O-ready Demat account? Click below.
