STT Calculator for options
Also see actual contract notes in below image which shows how STT is charged in both the cases.
Ignore negative values as STT is not levied for out of the money options. As Exchanges exercise options which are in the money, Strike price should always be below the Spot closing price for calls and Strike price should always above Spot closing Price for Put Options.
Here is a live example of STT calculation. We have executed a trade in options on expiry day in two accounts. Both accounts we traded Nifty 5600 CE 28 Mar 2013. In one account we let the option exercised by exchange by not squaring off and in another account we squared off option position during market hours. While there was NIL (Zero) STT charged for options squared off during market hours, STT was 355 rupees for the option which was exercised by exchange after closing of trading hours. I am attaching screenshots of contract notes to show the difference (personal details were erased) in STT calculation during both square off and exercise (Click on the image for bigger view).
STT Calculator for options is very useful to calculate the STT (Securities Transaction Tax) you pay while trading in options. STT is calculated in two different ways how the long positions in options are closed. The most important thing to know is there is a lot of difference in the STT you in both ways. First way is to square off options positions by selling them in the market before expiry. The second way is if the options are in the money and left open till expiry, exchanges squares off all in the money options. One should note that STT is levied only on the in the money options exercised by exchanges which are exercised.
If you square off buy positions in options in normal market STT is charged ONLY ON OPTION PREMIUM and the STT RATE IS only 0.017%.
If you leave In the Money buy positions in options and as exchange squares off STT is charged on the value of CASH MARKET CLOSING PRICE * LOT SIZE and the rate of STT is a whopping 0.125% (Against 0.017% when squared off).
Option buyers, specially when they are in the money should consider squaring off in normal market without leaving it to be exercised by exchanges. The interesting thing is even if the option is slightly in the money, your account may actually debited due to high STT !!.
See the difference in STT Calculator for options here.
In Budget 2013- 14 presented by Mr Chidambarm, Finance Minister on 28 Feb 2013, it is proposed to reduce STT on Equity Futures only. The proposed changes will not have any effect on calculation of STT on options.
This calculator is for information purpose only. The rates of STT may change and you are advised to check with your broker for current STT calculation before taking any trading decisions. This calculator is made as a tool to help to calculate STT calculation in case of exercise of buy postions in options after expiry which are in the money and calculation of STT in case options buy positions are squared off in normal market. Please refer NSE circular No. NSE/F&A/10706 Dated May 15, 2008 for details before taking any trading decision.