Comment on STT Trap - Options Expiry - NSE BSE MCX-SX
commented on
08 Dec 2013, 12:52 PM
You would typically see this scenario on the expiry day, and closer to 3.30. So if Nifty is at 6050, Nifty 6000 calls and Nifty 6000 puts ideally should have minimum value of Rs 50 each, but you might see both trading at 46.
I have seen many traders think of this as an opportunity, but it is not so.
The reason for them trading at 46 would be because of the cost of STT, if the position is held post 3.30. So even though it might be at 46, the cost of STT would be around Rs 300 or 6 points, and hence the actual value of the option being 50+.