InvestorQ : Can I open a trading without opening a demat account?
manisha Kolvenkar made post

Can I open a trading without opening a demat account?

Answer
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Maniish Lofar answered.
2 years ago


That is an interesting question. You can surely do that and there is no compulsion on you to open both the accounts. You can choose to open an only trading account, but that decision will entirely depend on your intent. For example, if you only intend to trade in futures and options and currency derivatives, then you only require a trading account. That is because; F&O are contracts and not securities that can be owned. For example, if you have a RIL call option or Reliance futures you cannot go to the exchange and ask for equivalent shares. Similarly, if you have a put option on a stock, you cannot insist on giving delivery of shares. But these rules may change with the advent of compulsory stock settlement in case of selected stock futures and options.
You also need to understand the limitations of opening a trading account without a demat account. Firstly, you cannot deal with shares in any form with a demat account. You may wonder, “Hey, I am only going to trade on an intraday basis. Then why do I need a demat account.” The problem is what you do if you are not able to close out the trade. You may forget or your broker system may go down. In that case, you need a demat account to take delivery of shares. That is why SEBI rules do not permit you to buy and sell shares (even intraday) unless you have a demat account. Also, if you want to apply for IPOs, demat account is a must.