F&O profits at risk: How much one lot of Nifty futures and options costs after the STT hike
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The Union Budget 2026 has changed the economics of derivatives trading in India through increase in transaction taxes. The government has raised the securities transaction tax on equity derivatives, making every trade in futures and options trade more expensive, regardless of whether the trader makes or loses money. While markets reacted sharply to the announcement, the real impact becomes clear only when the math is broken down. The government has justified the tax hike by pointing to the sheer size of India's derivatives market. The total volume of futures and options trading is more than 500 times India's GDP. With GDP estimated at around Rs 300 lakh crore, derivatives turnover runs into extremely large numbers. The view from policymakers is that trading has become excessively speculative and that higher costs are needed to cool activity. Market participants, however, argue that derivatives are not just speculative instruments....