Comment on STT Trap - Options Expiry - NSE BSE MCX-SX

Nithin Kamath commented on 08 Sep 2016, 05:49 PM

All options even though gets cash settled in India, for all theoretical purpose it is assumed that actual delivery of the underlying happens (that is why F&O trading is considered non speculative). So when the option expires in the money, it is assumed that the actual exchange of the underlying contract happens. Since this is a delivery trade, STT is applicable at delivery rates and on the entire contract value. STT rates dropped for delivery of equity from 0.125% to 0.1% a few years back, somehow govt forgot to reduce the 0.125% to 0.1% for options exercise.

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