To start trading in Futures and Options(F&O), all you need to do is open an online trading account.
When you buy in the cash segment, you have to pay the entire value of the shares purchased – this is unless you are a day trader utilizing margin trading. You have to pay this amount upfront to the exchange or the clearing house.
This upfront payment is called ‘Margin Money’. It helps reduce the risk that the exchange undertakes and helps in maintaining the integrity of the market.
Once you have these requisites, you can buy a Futures and Options(F&O) contract. Simply place an order with your broker, specifying the details of the contract like the Scrip, expiry month, contract size, and so on. Once you do this, hand over the margin money to the broker, who will then get in touch with the exchange.
The exchange will find you a seller (if you are a buyer) or a buyer (if you are seller).