Why is income proof necessary for F&O trading?
Trading in Futures & Options (F&O) is exciting but also comes with increased risk. FYERS requires income proof to ensure you're financially equipped to handle the risks associated with these leveraged instruments, in line with exchange regulations.
Why is income proof required for F&O trading?
Futures and Options are derivative products that involve margin trading—essentially trading on borrowed funds. This increases both potential returns and risk. As per SEBI and exchange guidelines, brokers like FYERS must verify that clients engaging in F&O trading have the financial standing to bear potential losses. This safeguards both the trader and the financial system.
Acceptable documents for income verification
- Income Tax Return (ITR): A copy of your latest filed return with the Income Tax Department.
- Holdings statement: A recent Demat holdings statement from FYERS or any other broker.
- Bank account statement: A bank statement showing income activity for the past 6 months.
Tip: Make sure your submitted documents are legible and clearly show your name and income figures to avoid processing delays.
What If I don’t have any of these documents?
| Scenario | Resolution |
|---|
| I'm a student or have no income documents | You won’t be allowed to trade in F&O. You can still invest in equities and other segments without income proof. |
| My income is below the required threshold | You may not get F&O trading access unless you provide alternative financial proof (e.g., substantial holdings). |
| I submitted proof but haven’t been enabled | Document processing usually takes up to 24 business hours. Contact FYERS support if there's a delay.
|
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