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Investments in Indian Equity and Research => India Stocks and Shares => Topic started by: resh on June 01, 2017, 03:19:31 PM

Title: Calculation of STT for In-The Money Options on Expiry
Post by: resh on June 01, 2017, 03:19:31 PM

Please note that whenever an option is exercised, the applicable STT rate is 0.125% on the settlement price (underlying closing price). It is advisable to square off in the money option by selling in live market (and not letting it expire) to avoid extraordinary high STT.

For Example:
On the day of expiry, you have an outstanding position in Nifty 5000 call and Nifty closes at 5050.

Case 1- If you square off this position by selling in live market at Rs. 50, then STT payable will be =Premium * qty * 0.05 %
= 50*75*0.05% = Rs 1.875

Case 2 – If you don’t sell in live market and leave the outstanding call position to expire, then STT payable will be = Settlement price * qty * 0.125%
= 5050*75*0.125% = Rs 473.4375

Please take note of above example and act accordingly.