When shorting options, does premium received credited to our trading accounts and reflects in our funds section in kite?
If yes, then isn’t it exactly like selling a stock holding in cnc, or are there any different treatment in these two.
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When you Short Options you will recieve premium, which will show in funds section on Kite.
On the day you Sell the Option, this premium can be only used to take long Option position in same segment (ie. proceeds from equity options can’t be used for currency or vice versa), when this is settled on T+1 day you can use this to trade in any segment.
It is different. For example, when you sell a stock from your holdings in CNC, there is no margin blocked, whereas to Short Option there is SPAN + Exposure margin blocked which varies from instrument to instrument.
You can learn more about Options here.