Glossary/ Tax
Tax
STT
Securities Transaction Tax, levied on trades. On options it applies differently to a sold contract than to one allowed to expire in the money — a distinction that has surprised many people on expiry day.
Where this comes up
Lessons that use the term in context, which is usually more useful than the definition on its own.
- Expiry day mechanics — Settlement, exercise and what actually happens at the close.
- What costs really take — Brokerage, STT, slippage and impact, added up honestly.
- How turnover is computed — The number that decides whether an audit applies.