25% Tax on Options Traders?
46sHigh-impact tax change triggers fear and curiosity among options traders.
▶ Play ClipAI Summary
This video explains the recent changes in India's securities transaction tax (STT) and other charges affecting stock market traders and investors, particularly focusing on the increased tax burden on option sellers and the new penalty rules for short delivery. The speaker clarifies the impact of these changes on different types of traders and provides practical examples to illustrate the new cost structure.
Chapters
[00:02]
STT Increase on Options
The government has increased the Securities Transaction Tax (STT) on options from 0.017% to 0.021%, and on futures from 0.01% to 0.02%. This means higher costs for option and futures traders.
[00:30]
NSE Transaction Charges Updated
The NSE has updated its transaction charges, increasing them from 4% to 6%. This adds to the overall cost of trading.
[02:41]
Example of Option Settlement
An example is given where a 450 put option with 40,000 quantity closes at 4:52, which is out of the money. The speaker explains that if the option is out of the money at expiry, it is not exercised and becomes worthless.
[03:29]
Nifty Options Not Exercised if Out of Money
If a Nifty option is out of the money at expiry, it is not exercised. The option buyer loses the premium paid, and the seller keeps the premium.
[08:30]
Penalty for Short Delivery
If a stock is not delivered (short delivery) in the F&O segment, a penalty is charged. The penalty is 20% of the stock's value, and the exchange may also impose additional charges.
[12:22]
Margin Shortfall Penalty
If a trader's margin falls below the required level, a penalty is charged. The penalty is 0.5% of the shortfall amount, with a minimum of ₹500. For example, if the shortfall is ₹90,000, the penalty is ₹500.
[16:35]
STT Calculation Example
The STT on options is now 0.021%, which means for a contract value of ₹1700, the tax is ₹0.357. This is a small amount per contract but adds up with high volume.
[17:37]
GST and Stamp Duty
In addition to STT, traders also pay GST and stamp duty on their trades. These charges add to the overall transaction cost.
The video concludes that the increased STT and other charges will significantly impact option and futures traders, especially those with high volumes. The speaker advises traders to be aware of these costs and factor them into their trading strategies.
Study Flashcards (4)
What is the new STT rate for options?
easy
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What is the new STT rate for options?
easy
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0.021%
16:35
What is the penalty for short delivery in F&O?
medium
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What is the penalty for short delivery in F&O?
medium
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20% of the stock's value
08:30
What is the margin shortfall penalty?
medium
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What is the margin shortfall penalty?
medium
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0.5% of the shortfall, with a minimum of ₹500
12:22
What happens to an out-of-the-money option at expiry?
easy
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What happens to an out-of-the-money option at expiry?
easy
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It is not exercised and becomes worthless.
03:29
💡 Key Takeaways
📊
STT Increase
This is a direct cost increase for all traders, making it a crucial fact for anyone trading options or futures.
00:02
📊
Short Delivery Penalty
This penalty can be significant (20% of stock value), so it's essential for traders to avoid short delivery.
08:30
⚖️
Margin Shortfall Penalty
Understanding this penalty helps traders manage their margins effectively to avoid unnecessary costs.
12:22Full Transcript
[00:02] to last trading sessions below stock market in analogy vagnetalyan bismil ok side inchi government hat ne pinchaun security transaction tax no 25% agar ka pensioner din then options ne traits nawal of you just ne teacher
[00:18] nawal of you just ne teacher pe 25% tax extra pechels and this related d impact ever kelon tu di option traders ke alone tu di future traders ke di hdd overall ka stock market lo ye 20 impact thi isko
[00:30] update nsc value transaction charge need 6% previous tu 4%
[00:48] most important and tax of this video is video sed aur main objective me do not axe options me nsc value hi expiry inchi match ending below value hi expiry inchi match ending below remotes na so next april
[02:06] recent related video chimney friends i hope related video chimney friends i hope video tumi ko clarity vastu ye pudur art choos to nahi ye point lena please video nahi till kunda like ke tu
[02:22] ped to nahi efforts nahi anchor ie brightness and sandy inter option community ki like futures and option trading community ki biggest think surprising think community ki biggest think surprising think recent times people 20-21 december
[02:41] 450 pat option 40000 quantity ka number good to le dos in n point of d money closing point k almost 450 closing point k almost 450 exact number
[02:59] 25 35 difference in demo 4:52 tandi pat option close-52 out of d money pat option to d name in d money
[03:13] stock need delivery valsad recruitment stock delivery di navigation simple girl i think close and price demo 4502 kani satellite 449 mins 44965 mins 35 in d money just because a 35
[03:29] price in d money closed on kar nanga and n 30 do not n 30 do not exercise Option take do let's I think se value april 2022 lo do not access code di ever other
[03:43] bandra utensils wala in which channel were they stock in delivery ke batte do and my stock in delivery so you point take do so so you point take do so you read engine raw tanga
[03:57] stock ne delivery baad sachin kant agar stock
[04:17] andar stock lo 13 loss hai in d because option no stock chilli den ka nanga padam option no stock chilli den ka nanga padam election price
[05:02] this price a rhe hain unke satellite kuch close hota hai governance rona wavel 350 320 and 3 30 katmunda hai na sir ye sadan ka na and close that much price hi can i satellite press download 3 in 331 ko most of the market
[05:17] participants coir of k taurru existing on oppositions not close test tu r kotha positions ne rap continuous market ko sam tu dehradun
[05:41] close i point ki 450 tu kuch hindi kahani I want to know about the futures and futures trades in hindi but I am not sure about the settlement process
[07:39] Network Names Stock
[08:30] Ammalani i.e. Present Na Dobule ₹10000 Mains ₹10 Premium Ne Kitna Score Below Mains ₹10 Premium Ne Kitna Score Below Stock Enterprise Par Utna 500 + Stock Stock Enterprise Par Utna 500 + Stock Not Kal Bhaiya Stock Related
[08:47] Stock Ne Delivery Tha Isco Jo Seller Delivery Avali Stock Avali Ta Demat Bhaiya Kal Na Situation Penalty Read Kuk Mine
[09:02] Kal Na Situation Penalty Read Kuk Mine Ko Koko Penalty i.e. Original
[09:39] Net Loss Was 9000 Loss Option Seller's ₹9000 Game Next Contract Movable Do Not Exercise Option His Mains Option These Two Nook Net Profit And Loss De Settle Se Do Not Access The In D Connaught Look Manoviji Three So Kal Bhaiya Stock In 30 Quality Kal Seller
[09:55] Dogs Diwali Similar Patki Think Changing Note At
[10:32] in the market participants brokerage paripoina sis delivery 30% only in d money loan out of d manikani at d money friends starting loans happen closing price bheru closing price you see and out of d money
[10:48] of d money price army concho out of d stock trade ke wala this is options ke version
[11:02] version april 30th olympic position first double group chapter delivery
[11:18] position first double group chapter delivery was yesterday less meaning if double lock hote broker double page because human page no exchange leave settlement today n market participant chest doubledhnanchhi vasool c and brightness sarq tha
[11:33] doubledhnanchhi vasool c and brightness sarq tha akdik ka dem tak meena big pain so penalty around in d expansion but
[11:48] dant part you make margin shot full penalty in kood ajab tanu because kunis reference in kood ajab tanu because kunis reference positions 30th
[12:22] I have a margin of ₹1 lakh and above have a margin of ₹1 lakh and above 10% of the total margin. I have a one percent
[12:35] total margin of ₹10 lakh. I have a short position of ₹10 lakh and I have ₹19000 short. I have a ₹ 10 lakh short position. So, firstly, I have a trade of ₹90000 but I have a loss of ₹ 90000 and I have to recover it. So, according to my rules, I have to take
[12:49] So, according to my rules, I have to take ₹1 lakh and above. I have to take 10% of the total margin. I have to take ₹90000 and above. I have to take 0.5% of the total margin. I have to collect ₹90000 and above. I have to take ₹500 from the second trade. I have to take ₹90000 and above. I have to take 0.5% of the total margin. I have to take ₹90000 and above. I have to take ₹500 from the ₹90000 and above. I have to take ₹500 from the second trade. I have to take ₹90000 and above. I have to take 0.5% of the total margin. I have to take ₹90000 and above. I have to take ₹500 from the
[13:08] third trade. I have to take 5% of the worst option is given on the basis of one of the
[13:22] two options, low cuttles in the target market on March daily basis. Margin penalty penalty. Margin shortfall penalty ₹5000 margin shot wala open tika chappal and kunti mar jeans sariga maintain should they do it in
[13:40] March in meku kudarga pothunte sellers out sellers out and student marking is
[14:01] balance shares Gondia option sale as particular margin shortfall related to those 12 stocks have delivery ki demat account ko le do mara asundar par lene must let an time look at the broker first internal action internal option hypothe ok well
[14:15] option no recently count on hi presentation complete dekandi exchange your call penalty in the
[14:27] worst option exchange 20% penalty stock option option big think stock no delivery imbalance in an table like appu avatar to value through action by option
[14:41] participant The actual exchange rate of the stock is 1700 rupees and the market price is 1700 rupees. The market price can be reduced by 1700 rupees. The difference between the market price and the contract is 1700 rupees. The Star Stock Demat Star Stock Demat account is
[14:58] rare in this aircraft. An exchange worker will lose max 20% if penalty International
[15:19] reality is in chipna and me rate se d unko next family ko unko
[15:31] out of de money loan is dukhan wala experiment future
[16:35] parallel ka governance option in security previous ka 0.017% i.e. 25% pe 0.021% naruto 021 is d confused ho utana
[16:47] 0.021% naruto 021 is d confused ho utana cross type and aparts 1700 rupees par tax collect chestante appudu 2100 rupees par tax and collect chest and chamber connect vintage options related ka bottom chalta ke 2016 ne
[17:02] 0.01700 rupees per annum already pincher ₹5000 i.e. government pension di idea legomari here government pension di idea legomari here mistake well no Read this, anger at 1700 mistake well no Read this, anger at 1700
[17:20] means the government will release the previous one is going to be crore inches ₹6200 of the option
[17:37] then this also query GST ladies stamp duty them Mantra 25% futures related ka previous ka 1000 per crore dewar 1000 250 crore
[17:56] half of Hindi Nastamai's option tr cont breakfast futures traders garbage destroy breakfast futures traders garbage destroy so configurational
[18:13] overall the net to net based is to users taking on trade lo options over which significant portion volume to the government
[18:27] area charge kiya previous ka six para jan 1st 20-21 reservation
