can you please confirm if my understanding of charges on EXERCISED Nifty Index Options is correct?
I have thoroughly read the relevant articles in z-connect. But in the internet I have seen people giving caution that one must square off Nifty ITM options to avoid “heavy penalty”. Probably they meant the STT trap, which is now obsolete. Yet I wanted to confirm explicitly.
- ITM long options: I pay 0.125% of intrinsic value as STT, Rs.20 brokerage, and the other charges are like those for OTM long options.
- ITM short options: STT has already been paid, so I pay Rs.20 brokerage, and the other charges are like those for OTM short options.
- There is NO “fine” or charges from the exchange/broker for not squaring off ITM options. The whole process is cash settled i.e. after paying the charges, if any profit (intrinsic value) is left, I get paid, otherwise I pay to cover the charges. And I don’t have any other obligations.
Thanks and Regards.