I want to start trading in nifty options with small capital, like buy/sell options and hold it for 2-3 days then square off. What type of account do I need? Is holding option contracts for 2-3 days or till expiry treated same as taking delivery of stocks?
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You need a regular derivatives trading account to trade options
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Options buying involves a small outlay of cash where as option writing requires a higher amount. Usually option writing margins are as good as margins required for trading futures.
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There is no concept of delivery in derivatives since technically derivative contract (in India) has a shelf life of 1 to 3 months. Delivery is when you can hold on to your investment to perpetuity. However, for sake of learning convenience, you can treat it as a delivery type of trade.
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You need to open a regular Derivative trading A/c or FnO Account. Don’t go for Equity Trading A/c, here by default your demat a/c will be opened by the broker, which will have yearly demat maintenance charges. To avoid this you can open a normal FnO a/c. Zerodha has the option.
One more point in whatever Karthik and Sudesh has said is since there is no concept of delivery as such so you don’t really need a demat account. So you can start trading with a regular derivative trading account.
- For Equities open a regular Equity Derivative Account. You will be enabled for exchanges NFO, BFO and CDS.
- If you also want to trade commodity futures, you need to open a Commodity Derivative Account. You will be enabled for MCX exchange.
Since commodity segment does not offer options, you can stick to the first one only.