Can I use the options premium received to place new orders in F&O?
Yes, when you sell an options contract, the premium you receive is credited to your trading account on the same day. However, this amount can only be used under specific conditions and cannot be freely used across all segments or trade types.
When and how can you use the premium?
You can use the credited premium exclusively for buying options contracts within the same exchange on the same trading day.
Example:
- Mr. X sells (writes) one lot of Nifty 18000PE at ₹100
- Lot size = 50
- Premium received = ₹5,000 (50 x ₹100)
- This ₹5,000 can be used immediately—but only to buy other options contracts on NSE F&O.
Restrictions to keep in mind:
- Can be used for: Buying options on the same exchange
Cannot be used for:
- Buying or selling stocks in the Equity segment
- Selling new options contracts
- Taking new positions in Futures
Why are these restrictions in place?
The premium is treated as credit from an options trade and is subject to settlement norms. Until the funds are fully settled, they are not considered usable for margin-heavy trades like futures or selling more options.
What If...
| Scenario | Explanation |
|---|
| I try using the premium for selling another option | The system will reject the order due to margin restrictions. |
| I switch from NSE to MCX or BSE | The premium cannot be transferred across exchanges. |
| I want to buy an option after receiving premium | You can do so immediately—but only on the same exchange. |
Always plan your trades with margin and fund usage in mind. Rely only on available cash or fully settled funds when placing new margin-sensitive orders like futures or short options.
Last updated: 28 Jun 2025
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