Can I use the options premium received to open new F&O positions?
Option premiums received from exiting options long positions or entering new options short positions can be used for:
- New long option positions within the same segment on the same trading day (proceeds from equity options can’t be used for currency or vice versa).
- All trades from the next trading day (T+1).
For example, Mr Jose has Rs. 50,000 in his trading account as cash margins. On Monday, he sells Nifty options and receives a premium of Rs. 1 lakh. Margins against this trade will be made available on the trading day itself (Monday).
| Margin for | Margin Available on T day (Monday) | Margin Available on T+1 (Tuesday) |
|---|---|---|
| Buying Stocks | Rs. 50,000 (cash margin) | Rs. 1,50,000 (Rs. 50,000 cash margin + Rs. 1,00,000 options premium) |
| Buying Futures | Rs. 50,000 (cash margin) | Rs. 1,50,000 (Rs. 50,000 cash margin + Rs. 1,00,000 options premium) |
| Buying Stock/ Index Options | Rs. 1,50,000 (Rs. 50,000 cash margin + Rs. 1,00,000 options premium) | Rs. 1,50,000 (Rs. 50,000 cash margin + Rs. 1,00,000 options premium) |
| Buying Currency Options | Rs. 50,000 (cash margin) | Rs. 1,50,000 (Rs. 50,000 cash margin + Rs. 1,00,000 options premium) |
Still need help? Create Ticket
