Can the options premium received be used to open new F&O positions?

Can the options premium received be used to open new F&O positions?

Yes, you can utilize the options premium received to initiate new F&O (Futures and Options) positions. However, there are certain conditions to consider:

  1. Same Trading Day: On the same trading day, you can use the options premium received solely to initiate new long (buy) options trades within the same segment.


  2. Next Trading Day: From the next trading day onwards, you have the flexibility to utilize the options premium received for opening positions across all segments.

    • Related Articles

    • Can F&O positions be rolled over during the ban period?

      During a ban period for the traded contract, it is not permissible to roll over open F&O positions as per SEBI regulations. During this period, trading is halted, with traders not being allowed to take up new positions for the specific stock under ...

    • Why do F&O contracts enter a ban period?

      Futures and Options (F&O) contracts of stock enter a ban period when the stock's open interest crosses 95% of the Market Wide Position Limits (MWPL). The purpose of this ban is to control excessive speculation and prevent potential market ...

    • What are the risks of trading Futures and Options (F&O)?

      Futures and options (F&O) trading involves leveraging complex financial instruments, and without proper understanding, it can lead to substantial financial losses. Below are some common risks associated with F&O trading: 1. Execution Risks: F&O ...

    • What is the impact of a bonus issue on equity holdings and F&O positions?

      A bonus issue occurs when a company gives extra shares to its existing shareholders for free. Let's examine how this affects your equity holdings and futures and options (F&O) positions. Impact on Equity Holdings When a bonus issue occurs, the share ...

    • How do I trade in the F&O securities which are currently categorized in the ban period?

      The securities that have crossed 95% of the market-wide position limit (MWPL) are currently categorized in the ban period. Trading in futures and options (F&O) securities during the ban period can be challenging. This is due to restrictions from the ...