InvestorQ : I am planning to start trading in F&O. Will my F&O positions also reflect in demat account?
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I am planning to start trading in F&O. Will my F&O positions also reflect in demat account?

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diksha shah answered.
3 years ago
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Demat account is a statement of ownership of securities. When you buy shares you become the owner of the stock. That is when it comes into your demat account. Have you ever traded intraday? What happens to these shares? Do they come in your trading account? Why not? The reason is simple. When you buy 500 shares in the morning and sell the 500 shares by evening then you net position at the end of the day is nil. That means you have a net ownership of zero and so there is no question of demat account since there is no ownership created.
Now you may wonder why I am talking about intraday trading when you are asking about F&O. The logic is the same. Like your intraday trades, all F&O trades are settled in cash. When you buy or sell futures/ call options/ put options then you only get a contract. You don’t get ownership of the shares. This is a contract based on your view that the price will go up or down. If you are on target you take the profit and go home and if you wrong you go home with a heavy heart. Neither future nor options create any relationship of ownership. You enter into these contracts to make money out of price movements. You may be right or you may be wrong, that is immaterial. But you can take your call option to your broker and say “Hey give me the shares”. No, it does not work like that. Since F&O are contracts and don’t create ownership, there is no impact on the demat account at all.
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