Can I sell a stock and use the sale proceeds for buying another stock on the same day?
No, you cannot sell a stock from your Demat account and use the sale proceeds for further trading on the same day. Here's why:
Before you purchase a stock, it is mandatory to allocate your free cash balance to the Clearing Member, a process known as allocation. When you sell stocks, the shares must be provided as pay-in to the Exchange, and the Exchange releases the funds payout on the next day (T+1). Until this payout occurs, there will be no clear balance in your ledger that can be allocated to the Clearing Corporation.
To avoid penalties and ensure compliance with trading regulations, we do not allow you to buy stocks based on the sales you have made on the same day.
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