Can I use the sale proceedings of an Option which I squared off today and buy some other option with that money today itself (without waiting for T+1 settlement)?

Assume my trading account balance is zero.

I have some option bought some days ago.

I am planning to square off today. If I square off today, I understand the sale proceedings, will be settled on T+1 day, ideally (if I need to withdraw that money, I can do it only tomorrow)

But my trading account balance will immediately show an increase today since I am selling that option.

Is it ok to buy some other option with the increase in balance in my trading account?

Or should I wait for tomorrow?

Is there any implication (side effects) if I use the money and buy today?


This post says penalty will be levied, please clarify


The answer is

Official link from NSE:

I cannot use the sale proceedings of the F&O contracts on the same day to purchase new contracts. I need to wait for next day. If I use, I will be charged with a penalty. If penalty is comparatively lesser than the earnings I would get by entering that contract, then I can buy the new contract on my own risk assessment.

The penalty is only around 1% of the amount which is the difference between what you purchased today and the free available balance in your account (ofcourse without considering today's option sale). This penalty is laid on all such transactions by NSE. No exceptions or random charging.

You can buy some other option on the same. No need to wait for next day.

Yes, of course you can buy, on the same day/time when a previous position is closed, no need to wait for T+1. And there are no consequences as such for it. It’s smooth.

Can anyone confirm this?
Is this penalty thing what Venu says, is random penalising from NSE?
How come ppl are doing it normally without any penalty (ppl who have answered, Yes I could do it)

Thanks for your clarification.
My interest is to know about any consequences.