How to avoid paying excess STT on the day of option expiry

STT can be a lot more complicated than you can imagine. Different products like intraday equity, delivery equity, futures and options have different levels of STT imposed.

When the Securities Transaction Tax (STT) was first introduced in 2004, most traders railed against it saying that it would literally finish F&O volumes in a nascent market. Nothing of that kind happened. In fact, after the introduction of STT, the F&O volumes have gone up manifold in the last 14 years. But remember that STT can be actually a lot more complicated than you can imagine. Different products like intraday equity, delivery equity, futures and options have different levels of STT imposed.

Let us first understand how the calculation of STT on futures differs from options. The basic