Imagine investing about Rs 11,250 in the stock market and getting a return of Rs 6.08 lakh in a span of five minutes.
But when the broker sends you the contract note, the securities transaction tax (STT) for the trade is over Rs 24 lakh -- almost four times the profit -- and it's not a printing mistake.
It happened with 27-year-old management student Chirag Gupta.
When about five minutes were left for the markets to close, Gupta saw that he could buy Nifty call options at 5 paise per unit and make a profit of around Rs 2.75 a unit.
He bought options that Nifty will close above 8,600 and it closed at 8,602.75.
Gupta bought all the Nifty lots (3,000) he could in the short span of time.
One Nifty lot has 75 units.
Later, he realised that his broker had deducted over Rs 24 lakh from his trading account for STT.
Gupta's mistake: He let the option expire.
The calculation of STT is different if a trader squares off the position before expiry and if he lets the contract expire.
Read more at http://www.rediff.com/business/report/this-day-trader-lost-rs-24-lakh-in-5-minutes/20170419.htm
But when the broker sends you the contract note, the securities transaction tax (STT) for the trade is over Rs 24 lakh -- almost four times the profit -- and it's not a printing mistake.
It happened with 27-year-old management student Chirag Gupta.
When about five minutes were left for the markets to close, Gupta saw that he could buy Nifty call options at 5 paise per unit and make a profit of around Rs 2.75 a unit.
He bought options that Nifty will close above 8,600 and it closed at 8,602.75.
Gupta bought all the Nifty lots (3,000) he could in the short span of time.
One Nifty lot has 75 units.
Later, he realised that his broker had deducted over Rs 24 lakh from his trading account for STT.
Gupta's mistake: He let the option expire.
The calculation of STT is different if a trader squares off the position before expiry and if he lets the contract expire.
Read more at http://www.rediff.com/business/report/this-day-trader-lost-rs-24-lakh-in-5-minutes/20170419.htm
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