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Why is income proof mandatory for F&O trading?

As per the regulatory requirement, if a person is trading futures and options, then, he or she has to produce income proof. Futures and options are leveraged derivative products and not an appropriate avenue for someone with limited resources/limited investment and low-risk tolerance. Hence, exchanges guide brokers to ensure that one has sufficient income or financial conditions, to be able to trade on high-risk products like F & O. The following documents are accepted as income proof: Latest 6 Months Bank Statement, Latest ITR copy, latest 3-month salary slip or DP holding statement as on date.