Charges on Options Trading in Zerodha

Did you know that a simple trade on Zerodha’s options platform could cost you more than expected if you’re not careful with fees? Understanding the charges is the key to maintaining profitability. Before diving into options trading, it’s crucial to know the various fees you might encounter. Whether you’re trading index options or stock options, Zerodha offers competitive rates, but there are still a number of charges that can add up.

1. Brokerage Charges:

Zerodha offers one of the lowest brokerage charges for options trading in India. The charge is flat at ₹20 per executed order, or 0.03% of turnover, whichever is lower. This flat-rate structure allows for better predictability of costs, especially for high-volume traders. Regardless of the order size, the ₹20 cap ensures that even large trades won’t come with sky-high brokerage fees. However, for smaller trades, the percentage-based fee of 0.03% might result in a lesser charge than ₹20.

Type of Fee	Amount
Brokerage Fee	₹20 per executed order or 0.03% of turnover

2. STT (Securities Transaction Tax):

STT is a government-imposed tax applicable to all options trading in India. For options, it is charged on the premium at the rate of 0.05% on the sell side. This means you’ll only pay STT when you sell your option contracts. While this may seem small, it can impact traders who execute frequent trades.

Transaction	STT Rate	Applicable On
Sell	0.05%	Premium (Sell Side)

3. Exchange Transaction Charges:

These are fees levied by the exchanges, and they are non-negotiable. Zerodha passes this cost onto traders. For options, the exchange transaction charges are ₹490 per crore on the premium turnover. These charges apply to both buying and selling transactions, and while they are not the largest fee, they are an unavoidable cost of trading.

Type of Fee	Amount
Exchange Transaction Fee	₹490 per crore of premium turnover

4. GST (Goods and Services Tax):

The GST is levied on the brokerage, transaction charges, and SEBI charges. The rate is 18%, which means it can significantly add up depending on how often and how large your trades are. GST is applied on top of most other fees, making it one of the more prominent contributors to your overall trading costs.

Type of Fee	Amount
GST	18%

5. Stamp Duty:

Stamp duty varies depending on the state you are located in, but in Zerodha, it is calculated at 0.003% on the premium turnover. It is collected only on the buy side and is relatively small compared to other charges. However, for high-frequency traders, this can accumulate into a noticeable cost.

Transaction	Stamp Duty Rate	Applicable On
Buy	0.003%	Premium Turnover

6. SEBI Charges:

A regulatory fee, SEBI charges 0.0001% of turnover. This is a minimal charge, but like all other fees, it adds up, especially for traders who engage in high-volume transactions.

Type of Fee	Amount
SEBI Fee	0.0001% of turnover

7. Call and Trade Charges:

If you prefer to place trades via Zerodha’s customer support team, there’s an additional ₹50 fee for each call and trade order placed. This is a significant charge compared to the usual ₹20 per trade through the online platform, so it’s worth avoiding unless necessary.

Transaction	Amount
Call and Trade Orders	₹50 per order

8. DP Charges:

For those trading in equity options, it’s important to note the DP charges that apply when you sell your shares from the demat account. Zerodha charges ₹13.5 per scrip, per day as DP charges, and this is levied only when you sell your holdings. While not directly related to options trading, it's a charge worth considering for those using options as part of a broader equity strategy.

Transaction	Amount
DP Charges (Sell)	₹13.5 per scrip/day

Summary:

When trading options on Zerodha, your profitability will depend not only on your trading strategy but also on your ability to manage these charges. A flat brokerage fee of ₹20 per order, along with exchange fees, STT, and GST, can accumulate quickly. Knowing the full spectrum of charges ahead of time helps you plan better and avoid surprises. While Zerodha’s fees are competitive compared to other brokers, understanding every aspect of the costs associated with options trading is crucial for both beginner and seasoned traders.

To maximize your profits, you need to stay vigilant about minimizing unnecessary trades, as each trade, whether profitable or not, will come with its associated fees. Additionally, high-volume traders stand to benefit most from Zerodha’s flat-rate brokerage model, but small-volume traders should still be cautious of the overall percentage of their returns that may go toward covering fees.