DOs and DONTs : Investing in Derivatives
DOs
- Go through all rules, regulations, bye-laws and disclosures made by theexchanges.
- Trade only through – Trading Member (TM) registered with SEBI or authorisedperson of TM registered with the exchange.
- While dealing with an authorised person, ensure that the contract note has beenissued by the TM of the authorized person only.
- While dealing with an authorized person, pay the brokerage/payments/marginsetc. to the TM only.
- Ensure that for every executed trade you receive duly signed contract note fromyour TM highlighting the details of the trade along with your unique client-id.
- Obtain receipt for collateral deposited with Trading Member (TM) towards margin.
- Go through details of Client-Trading Member Agreement.
- Know your rights and duties vis-a-vis those of TM/ Clearing Member.
- Be aware of the risk associated with your positions in the market and margincalls on them.
- Collect / pay mark to market margins on your futures position on a daily basisfrom / to your Trading member.
DON’Ts
- Do not start trading before reading and understanding the Risk DisclosureDocuments
- Do not trade on any product without knowing the risk and rewards associatedwith it.
Related posts:
- DOs and DONTs : Investing in Mutual Funds
- DOs and DONTs : Dealing with Securities
- BSE launches SENSEXmini derivatives contracts
- DOs and DONTs : Issue of Securities
- DOs and DONTs : Buyback of Securities
rishi kumar mishra said,
February 25, 2009 @ 11:43 am
thanks