if i let otm option expire, and let the exchange square them off does the exchange charge extra money,taxes etc i have heard exchange will send the account holder a bill later with all the taxes to be paid etc etc
If the Option expires OTM, it will expire worthless. There will be no charges. However, if you’re a option buyer and if the Option expires ITM, then exchanges charges STT at 0.125% on the intrinsic value.
This will not be applicable if you’re a Option seller as STT is already paid when short position is taken. Please check out this post for more details: What happens if I don't square off my positions in options? - #2 by ShubhS9
2 Likes