Comment on STT Trap - Options Expiry - NSE BSE MCX-SX
commented on
27 Jul 2015, 09:23 PM
I had bought 5000 PUTS NIFTY 8400 PE on 25 June 2015 on the expiry day at 3.26 PM. At 3.30 the Index was at 8415. But after settlement NIFTY closed at 8398. I was asked by my broker to pay Rs 42000 as STT.
MY QUESTION : A BUYER OF AN OPTION CONTRACT IS NOT OBLIGATED TO SELL OR EXERCISE AN OPTION BY THE VERY DEFINITION OF OPTION CONTRACT.THEN WHY SHOULD THE BUYER PAY STT ON THE OPTIONS HE HAS NOT EXERCISED?
AN OPTION BUYER HAS THE RIGHT TO SELL OR EXERCISE THE OPTION BUT NOT OBLIGATED TO EXERCISE OR SELL.