E-Investing India - Online Community for Investors and Traders  

Go Back   E-Investing India - Online Community for Investors and Traders > Derivatives > Stock Options
Read All Rules Contact Site Administrator

Stock Options Stock Options

Reply
 
Thread Tools Display Modes
  #1  
Old 2nd January 2010, 01:21 PM
Regular Member
 
Join Date: Aug 2009
Location: Bangalore
Posts: 684
Rep Power: 2995
rajivka has a reputation beyond reputerajivka has a reputation beyond reputerajivka has a reputation beyond reputerajivka has a reputation beyond reputerajivka has a reputation beyond reputerajivka has a reputation beyond reputerajivka has a reputation beyond reputerajivka has a reputation beyond reputerajivka has a reputation beyond reputerajivka has a reputation beyond reputerajivka has a reputation beyond repute
Send a message via Yahoo to rajivka
Default STT on Options



I found that STT charged on option is as below

In case of selling, the STT is 0.017% on premium
If exercised, 0.125% on settlement value

Premium is much less than settlement value. For example, If I sell a RIL CA-1050 option(Market lot 300) for premium at Rs 40 on 31st Dec.

My STT would be 40 * 300 * 0.017 = Approx Rs 2.

If I would exercise the same option at approx same price my STT would be

1090 * 300 * .125 = Approx 408.

Both the things means same to seller, But there is so much difference in STT.

Any reasons? Is this an unintentional mistake by govt?
Reply With Quote
  #2  
Old 2nd January 2010, 01:47 PM
Regular Member
 
Join Date: Aug 2009
Location: Bangalore
Posts: 684
Rep Power: 2995
rajivka has a reputation beyond reputerajivka has a reputation beyond reputerajivka has a reputation beyond reputerajivka has a reputation beyond reputerajivka has a reputation beyond reputerajivka has a reputation beyond reputerajivka has a reputation beyond reputerajivka has a reputation beyond reputerajivka has a reputation beyond reputerajivka has a reputation beyond reputerajivka has a reputation beyond repute
Send a message via Yahoo to rajivka
Default

Quote:
In case of selling, the STT is 0.017% on premium
If exercised, 0.125% on settlement value
Earlier the STT was 0.017% in both the cases. But in case of sell the STT was charged on premium + strike price. But now STT is charged on premium. So there is a reason to increase the STT in case of sell, whereas STT on exercise should remain same.

But instead of increasing STT on selling, they increased the STT on exercise. This proves my point that this is unintentional mistake.
Reply With Quote
Reply


Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

vB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are On
Refbacks are Off

Similar Threads
Thread Thread Starter Forum Replies Last Post
Exercise Options? murali_mds Basics of Derivatives 12 16th August 2012 06:32 PM
Futures & Options nchethan Markets & Indices 0 25th December 2009 05:39 PM
Options on Expiry? jaypee Stock Options 12 17th June 2008 06:48 PM
PPF Withdrawal Options RAMBO65 Other Personal Finance Issues 0 9th June 2008 02:26 PM
Options on futures AccuInvestor Stock Futures 1 14th June 2007 08:52 AM


All times are GMT +5.5. The time now is 08:29 PM.


Powered by vBulletin® Version 3.6.8
Copyright ©2000 - 2017, Jelsoft Enterprises Ltd.
SEO by vBSEO 3.6.0
Ad Management plugin by RedTyger