Option trading charges in India: one trade worked out

Why flat ₹20 brokerage hurts small trades

Most discount brokers in India charge a flat fee per executed F&O order. It's usually ₹20, or sometimes "₹20 or 0.03%, whichever is lower". For index options you almost always end up paying the flat ₹20, because 0.03% of the premium turnover is usually more than that.

Turnover just means price × quantity. So if a leg has ₹2,00,000 of turnover, ₹20 is 0.01% of it. If the leg is only ₹4,000, the same ₹20 is 0.5%. The fee didn't change. Your trade got smaller, and the fee became fifty times more expensive in percentage terms.

A round trip is two orders, one to buy and one to sell. So every F&O round trip costs at least ₹40 in brokerage, before any other charge. If your average winning trade makes ₹150 gross, that ₹40 is more than a quarter of it.

What is freeze quantity, and how does it double brokerage?

This one surprises people.

The exchange sets a freeze quantity for each index. That's the largest number of units (not lots) allowed in a single order. Roughly:

Index	Freeze quantity
NIFTY	1,800
BANKNIFTY	600
FINNIFTY	1,800
MIDCPNIFTY	2,800
SENSEX	1,000
BANKEX	600

If you want more units than that, the order gets split. You don't get a choice here, the exchange won't take a bigger single order.

Say Bank Nifty's lot size (units per contract) is 30 and you buy 33 lots. That's 990 units. The freeze limit is 600, so your buy goes to the market as two orders: 600 and 390. Your contract note shows two ₹20 brokerage lines for the entry, and two more when you exit.

So that round trip costs ₹80 in brokerage, not ₹40. And since GST is charged on brokerage, the GST goes up too.

A simulator that charges brokerage once per position, instead of once per order, makes every oversized trade look better than it was.

Is STT charged on both buy and sell?

No. STT on option premium is charged on the sell side only, at 0.1% of the premium turnover on the sell leg.

What that means in practice:

• If you buy an option and sell it later, you pay STT once, when you exit.
• If you sell first (go short), you pay STT once, on the entry.

So a bought option looks cheaper to get into than it really is, because its biggest percentage charge comes at the exit.

STT is also why letting a deep in-the-money option get exercised at expiry can be expensive: on exercise it's charged on a much bigger amount than the premium. Squaring off (closing the position) before expiry avoids that.

Stamp duty: only when you buy

Stamp duty is the mirror image of STT. It's charged on the buy side only, at roughly 0.003% of premium turnover on the buy leg.

It's small. Just remember the pair: STT is sell-only, stamp duty is buy-only. A cost model that charges either on both legs is wrong.

Exchange charges and SEBI fees

Exchange transaction charges on index options are a percentage of premium turnover. On NSE it's currently around 0.035%, charged on both buy and sell.

SEBI turnover fees are tiny, about ₹10 per crore of turnover. On a retail trade that's a few paise.

How is GST calculated on option trades?

GST is 18% of (brokerage + exchange charges + SEBI fees). That's it.

It is not 18% of your turnover. It isn't charged on STT or stamp duty either, because those are taxes and GST doesn't apply on top of a tax.

Because brokerage is in that base, the freeze quantity split costs you twice. Split one leg into two orders and you add ₹20 of brokerage plus ₹3.60 of GST on it. Do it on both legs and the split has cost you ₹47.20, not ₹40.

Full example: charges on one Bank Nifty options trade

Here's a complete round trip. Bank Nifty, lot size 30, 10 lots, so 300 units. That's under the 600 freeze limit, so it's one order each way. You buy at ₹200 premium and sell at ₹210.

Buy turnover is 300 × ₹200 = ₹60,000. Sell turnover is 300 × ₹210 = ₹63,000.

Charge	Buy (₹60,000)	Sell (₹63,000)
Brokerage	₹20.00	₹20.00
Exchange charges @ 0.035%	₹21.00	₹22.05
SEBI fees	₹0.06	₹0.06
Stamp duty @ 0.003%	₹1.80	nil
STT @ 0.1%	nil	₹63.00
GST @ 18% of brokerage + exchange + SEBI	₹7.39	₹7.58
Total	₹50.25	₹112.69

Total charges: about ₹162.94.

Your gross profit was ₹10 × 300 = ₹3,000. Charges took about 5.4% of that, and you kept around ₹2,837. That's a healthy trade.

Now use the same size but say you only caught ₹1 of premium (sold at ₹201). Gross profit is ₹300. Charges come to roughly ₹159, since STT drops a little with the lower sell turnover. You kept less than half.

And if you caught only ₹0.50? Gross is ₹150, charges are still around ₹159. The trade was green on your screen and red in your account.

What these charges mean for how you trade

There's a minimum move below which a winning trade loses money. In the example above it's around ₹0.55 of premium on 300 units. Below that, being right doesn't pay. Work out your own number for your usual size and index. It'll help you more than any indicator.

More trades means more cost. Twenty round trips a day at the ₹40 minimum brokerage is ₹800 a day before anything else. Over twenty trading days (about a month) that's ₹16,000. On a ₹1,00,000 account, you're giving up 16% of your capital in a month just on brokerage.

Stats based on gross P&L will mislead you. A win rate that counts that ₹0.50 trade as a win isn't measuring real money. Profit factor, average win and drawdown all need to be worked out after charges.

That's why this simulator computes every statistic on net P&L. A ₹15 gross win that cost ₹40 in charges shows up as a ₹25 loss, because that's what it was. The leaderboard goes one step further: a trade that makes money after charges, but less than twice its own charges, counts as a scratch rather than a win.

Quick answers

What is the minimum brokerage on an F&O round trip?

With a flat ₹20 per order, it's ₹40 for one buy and one sell. If your order is split because of freeze quantity, each extra order adds another ₹20 plus GST.

Who pays STT on options, the buyer or the seller?

STT on option premium is charged only on the sell leg, at 0.1% of premium turnover. If you buy first, you pay it at exit. If you sell first, you pay it at entry.

Is GST charged on STT?

No. GST at 18% is charged only on brokerage, exchange transaction charges and SEBI fees. STT and stamp duty aren't included.

The figures here are illustrative. Rates change and your broker's schedule may differ, so check any number against a real contract note before you rely on it.