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Can I use the Options premium received to open new F&O positions?

The settlement cycle of F&O is T+1. If you have sold options, the premium amount will be realized on T+1 day. 

The premium received from selling options once received will be considered as part of your free cash and may be utilized to make trades in Eq and F&O.

However, on T day i.e the day you sold the option contract, this amount will not be considered as margin as it's not realised. So, if you open an F&O position, with the option premium, you will be charged exchange penalty. If you purchase equity (CNC), you will only be able to purchase after consideration of the applicable haircut value.

Let's understand this with examples,

Case 1 -

You have sold Options and received a premium of Rs 1 lac. Assuming you have ₹ 50,000 apart from this in your account, you bought 2 lots of NIFTY FUT in NRML at 1,20,000. Since the premium is not yet realised, while reporting your margins to the exchange, we'll not be allowed to report the option premium value. So you will be charged margin penalty on the shortfall amount of ₹ 70,000 (1.2 lacs - 50k)

Case 2 -

You have sold Options and received a premium of Rs 1 lac. Assuming you want to buy 100 shares of Reliance at 1000. You will only be allowed to buy the quantity after the applicable haircut. Let's say the Haircut % on reliance is 12.5%. So, you will be allowed to purchase 87 shares of reliance (1,00,000 - 12.5% / 1000)