I sold LT 960 PE now it is in deep ITM. I’m maintaining required balance and tomorrow is expiry. I have two queries
Shares will be delivered to you in T+2 days, ie. on Monday, if there is Short Delivery then it can take up to 4 working days.
You will have to maintain margins in your account to take Short position in Call Option.
also in demat delivery might be t+2 but until that in zerodha somewhere those shares should be showing up?
as I already have that quantity of stock in my account why i need to maintain margin? this is strange…can i pledge them or something?
also whether excersing delivery through option is beneficial or squaring of position and buying in cash? from the perspective of charges
These shares will show in your holdings only after they are delivered.
Your risk maybe is limited when you do Covered Call but you are still required to maintain SPAN + Exposure margin to take Short position.
Yes you can pledge your shares.
From perspective of charges buying from cash market is better than taking physical delivery.
i read there is no STT on excersice put option…then what extra charges in excercing compared to cash delivery? can I get any link for charges related to this?
For the Short Option, the STT is already charged when you take a Short position. For physical delivery there is brokerage charged at 0.25% on the physically settled value, other charges are the same as taking the delivery position in the cash market, you can see the list of all charges here.
about .25% brokerage where is it mentioned in zerodha website? pls advise?
here .25% of contract value means .25% of 50k ( if 50k is contract value) or .25% of 500k ( assuming 500k value of physically delivery)?
also as stt is already applied while selling option whether stt will not be applied while excercising option for delivery compared to what stt is charged in cash delivery?
Contract Value = Strike Price * Lot Size * Number of Lots, assuming you had position in some Option and it goes for physical settlement, say strike price of 100 and lot size 5000. So the contract value here is 500,000 (100 Strike Price * 500 Lot Size * 1 Number of Lots), so the 0.25% will be charged on this amount.
STT for Options is different, when there is physical settlement there will be STT charged at 0.1% just like it is done for delivery trades in cash segment.
Here too STT will be on Strike Price * Lot Size * Number of Lots.
thanks
