Comment on STT Trap - Options Expiry - NSE BSE MCX-SX
commented on
02 Mar 2017, 10:07 PM
Yes the market would be factoring in the STT cost and will be trading at a discount to the theoretical value. Selling in the market at 35 or letting it expire at 60 will work out to be the same. What you need to ensure is when options are expiring just in the money, for example if Bank nifty closes at say 21005, your intrinsic value is only Rs 5, but STT cost is 20 points. This can cause much more losses than the option premium value.