Finally, after years of pushing for it, no more STT trap on options which are exercised.
So, if your ITM option strike of say 11800 gets exercised on expiry with the spot at 11900, at present you would have to pay STT of 11900x75x0.00125 -= Rs. 1,115.
But now it will be (11900-11800)x75x0.00125 = Rs 9.375 STT
Right now say bank nifty expires at 31972 and I have written 32000 pe the option buyer won’t exercise it as stt is more than option value… Even if there is a 1re gain the buyer will exercise it always… And the stt of 30rs is split during last 5 mins between buyer and seller… Now buyer won’t need to split any
This was a much needed steps which would remove lots of inefficiencies from weekly options. Options writers were enjoying lots of advantages because of this insane STT.
Now, it would level the playing field between writes and buyers. Additionally, directional strategies like debit spreads would become more practical.