When you sell your holdings from a depository or close your open positions, you receive a credit called Credit for Sale (CFS). However, this credit cannot be used to take new positions on the same trading day. Here’s why:

Statutory Guidelines and Margin Requirements:

• Upfront Margin Requirement:
  According to statutory guidelines, at least 20% of the transaction value must be paid as upfront margins when taking equity positions. If you do not have sufficient funds to cover the required margins, you will incur a penalty for the shortfall.

• T+1 Settlement:
  When you sell a stock from your Demat account, it takes T+1 day for the credit to be fully processed. This means that, despite generating sale value by selling the stock, the amount cannot be used for fresh positions on the same day. You must wait until the next day when the credit clears to utilize it for new trades.

Why Is Credit for Sale Restricted on the Same Day?

• Compliance and Penalty Avoidance:
  To avoid penalties and ensure compliance with statutory requirements, Credit for Sale is only made available on Trade Day + 1 (Next Trade Day) once the funds have settled.

By adhering to these guidelines, we aim to protect your interests and ensure that all trading activities are compliant with regulatory standards.