Options Trading in USA from India with USD earned via employment in USA when residing in USA

[RAG]

Hi, I am a Indian citizen who resided in USA for 10+ years and relocating back to India.

Is it legal here in India to do options trading in USA after returning back to India?

I know money remitted from India via LRS can't be used for derivatives trading but I don't know if trading US derivatives (OPTIONS) with money earned while in US is legal for an Indian citizen staying in India.

Thanks in advance !!

AI Summary

Foreign derivatives trading may be restricted for Indian residents unless using overseas funds and compliant trading channels.
Indian residents trading US options face dual constraints: LRS funds cannot be used for derivatives, whereas funds remaining in overseas bank accounts and traded through a US brokerage are treated differently. Permissibility depends on residency, whether funds were remitted to India, and compliance with FEMA/RBI capital account rules and SEBI's restrictions on foreign derivatives; recent FEMA amendments create specific pathways under conditions. Traders must confirm broker/platform compliance and fulfil reporting, tax and disclosure obligations.