Trading Derivatives in USA from India

I think one will have to start off with a big capital with that route. I read somewhere that to start an investment company in Dubai, one needs a minimum share capital of 25 Million AED. Do you know someone who has done it with a low initial investment?

There r no capital requirement for Free zone companies( sharjah,RAK). Only licence fee which is like 2L -3L p.a.FZC/ FZE r different from local UAE cos which also requires emirate partner. FZC inestors also eligible for visa n work desk

https://www.rakez.com/

2 Likes

Will definitely look into it. Already sent them an email for more information on this topic. Thanks!

1 Like

Goodluck. Do share details if this method works

Nithin, since you’ve already researched on this subject, are the suggestions from Venkatzerodha feasible if the initial investment is not an issue?

Yeah, you can. If you are ready to go through all that trouble.

@namitjain2890
I think upto Five partners are allowed in FZC who can share yearly fixed cost such as licence fee and auditing the financials of FZC etc.
But I am not sure about opening a trading account with american broker to directly trade in us exchanges… Europe /London seems to be easier place to start and also the trade timing is not late night that of US markets

2 Likes

I’ve already spoken to TD Ameritrade, a reputed broker in the US. They have no problem in opening an individual account from any country. Will have to check about companies though. But yes, if the route via UAE is not cumbersome and expensive, then UK/US or any other market for that matter shouldn’t be a problem

1 Like

@namitjain2890 did TD Ameritrade allow you to open a margin account ?

1 Like

@Kumaresh_Pandian Yes, the problem is with RBI, we are not allowed to trade in derivatives outside of India. They have no problem in opening a legal margin account for you given you submit a few documents.

1 Like

Got it. Thanks.

Did you check with Interactive Brokers India? They seem to allow individual traders to trade on overseas markets using a cash account.

Buying stocks is not an issue. It’s trading in derivatives or anything that requires a margin a/c that’s causing an issue. And yes, I have an active interactive brokers india a/c.

1 Like

My bad, indeed it’s a margin account that is required. Wonder why so much restrictions a trader has to face in India.

long back i had an account with Smith Barney . By default selling options were allowed and helpdesk guys clarified that to enable option wriitng i need to have minimum 25k USD in the account and need to have some prior experience in derivatives…
not sure about the current scenario… but my guess is derivative trading for retail ahs got many restrictions

2 Likes

I am currently based in Netherlands but would be moving back to India soon. Would it be illegal if I fund my margin account using the Euro account I have currently and then continue trading from India?
I can keep my Euro account active even after moving to India. I would keep enough liquid cash in my margin account to avoid a margin call.

U might have legal issues once u are an Indian citizen. But as long as u are a NRI (holding a OCI card), and have nationality of other country, there should be no issues. You’d be subject ot the host country’s rules on this matter.

Do note though resident indians as per indian laways are those who stay in India for a conntinuous period of 12 months
Whether this applies to NRI is unknown

Therefore, suggest u contact a professional CA in India regarding these matters.

And if u wish to give up ur Abroad citizenship,m then u have to close the margin acc along-with it. SInce Indian citizens can’t trade margin accounts outside india.

Welcome to India.
Where Modi talks about generating employment, and bureaucrats in various branches of govt (Incl SEBI/IT) do retrograde moves

4 Likes

Hi Namit - did you explore the option of opening a proprietorship or small company in a foreign jurisdiction, and using that route to legally trade on margin on overseas exchanges, and TraderVenk had suggested in his Sep 2017 post? Thanks.

Yes I did. Did not find anything better than the options mentioned in this forum. Still, I might be wrong, do share with us if you find anything better :slight_smile: