Why Can't I Use Sale Value to Take Fresh Short Positions in Options

You might not be able to use the sale value in the following scenario

  1. Scenario:

    • Opening balance: ₹10,000
    • Option position value: ₹1.5 lakhs
    • Sold the position for ₹1.5 lakhs

  2. Current Balance:

    • ₹10,000 (opening) 
    • + ₹1,50,000 (sale) 
    • Total = ₹1,60,000

  3. Issue:

    • Attempting to sell 1 lot of Bank Nifty Options requires ₹1,38,000 margin.
    • The order is rejected because the margin (SPAN + Exposure + Additional Margin) must be provided upfront.

  4. Reason for Rejection:

    • The sale proceeds of ₹1,50,000 will only be released by the Exchange on T+1 day. and
    • Funds are not available immediately for new short positions.

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