Hello , i sold 9500 pe and 9700 pe and bought 9800 pe , now all are expiring worthless , my question is to cover 9500pe and 9700 pe and sell 9800 pe or leave it all to expire worthless ? if i leave it higher stt will be levied?
When a buy option position expires worthless, it will expire at Rs.0. The STT is charged on Rs.0 and hence, there is no STT. You can just let it expire. Also, STT is charged only on the sell side, so if you have sold options first and it has gone to 0, you get the full premium and no STT is charged on the buy trade. So you can let this expire as well.
Note: If your buy option position comes into the money, then towards expiry, the Risk team will calculate if your profit on the option is greater than the increased STT at expiry. If the profits happen to be lesser than the increased STT, then your position will be squared off by the Risk team so you don’t have to pay the additional STT that you would have to pay if the option expires. So no more STT trap. Read this for more.
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…then your position will not be exercised by the Risk team so you…
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Ok Srinivas sir , so my buy position is 9800 pe , now it is OTM , so leaving that to expire wortless and both 9500 pe and 9700 pe sold , so leaving that also worthless , Thanks sir .
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