When traders Write (Sell) Options, they receive an Option Premium as a credit. However, this amount can be used only for specific trades:
- On the same trading day, the premium received can be used to buy new option contracts.
- It cannot be used to sell/write new options or take futures positions immediately.
- The premium becomes available for full margin use only from the next trading day after settlement.
Understanding these rules helps traders plan their F&O positions effectively.