I’ve been trading in options with significant volumes, but what I realised is the taxes and brokerage charges are so high, it’s quite difficult for anyone to become profitable. Have decided to completely quit and exploring ways to trade in US options.
Recently have seen the liquidity on bse sensex options have dropped significantly and the slippage on both the exchanges gotten too worse. If anyone oberve one minute candles of options, the significant volume candle causing options prices to crash significantly even though the index hasn’t moved much. Poor taxation structure and dumb regulatory rules going to kill this market soon.
I think RBI blocks derivative trading through LRS(though I can’t find the exact section of FEMA doing the blocking). I think ODI might be a possibility, but it’s a operational nightmare.
As a trader myself for some years and having dabbled in options,cash mkt and futures, i cwme to the conclusion that options are not prudent in many ways. poor taxation or say govt. wants to punish frequent trading (i think from ur posts u feel like an intraday trader probably 1-5 min candles). if u do frequent trading, then charges will be very high along with taxes at end of year as well (not just STT) - even if u manage to make a profit . this is basically systems way of telling dont do frequent trading…
apart from that if u want to do options only, shifting to longer time frames above more than 15 days makes trading easier…gamma reduces, theta increasrs, premiums to sell are higher…if u want delta dont go for options id suggest…in general tho…i came to the conclusion that something is seriously wrong with indian option mkt around end 2024…liquidity was good theb but even backtested strategies werent producing long term profitability…then JANE street came to light in 2025…so point being higher liquidity also may not produce the results u want…i think u need to think alternatively than just moving mkts. cheers
Interesting take. BTW, us markets have better liquidity and better opportunities than india. Well, it’s quite tough as well, but if you’ve system in place you can make decent money.
If I am right, I have seen your verified pnl on x, the numbers were crazy, anything other than stt and frequent regime changes you think is affecting profitability? I am kinda surprised you are saying this with numbers like that
Market regime has changed and the slippages have become really bad, especially in sensex options. Nifty was fine, but December series was really bad. Hopefully, activity should become normal in the coming months.
Regarding STT, and other charges, yes its really high, when you see your pnl statement it hurts.
