Option Trading Charges

Have you planned to invest your money in future trading or are you keen to trade as an options trader? Then it’s better to begin with a strong understanding of the option trading charges. 

This article will guide you through the charges involved in option trading and will also discuss some other charges that are hidden by most of the brokers. 

So, let’s delve into this article by initiating with the meaning of option trading! 

Options are a subcategory of Derivatives and can be defined as a contract that gives a right (without an obligation) to the buyer or seller to purchase or sell the executing order at the predefined value, known to be strike price, within the contract’s expiration. 

Option Trading is carried out between two parties namely buyer and seller and one of the main reasons for using options is because it acts as a risk managing technique.

As said earlier, options give the right to the holder to execute the trading deal at the strike price hence even if the value goes up, down or opposite to the holder’s prediction, he can easily buy or sell the underlying asset at the fixed price. 

However, before picking such a complex segment you must be aware of the seven common option trading mistakes that could be avoided easily while trading.

Now coming back to the charges of options trading in India, here is the complete details of the brokerage imposed by the topmost broker in India. 

Option Trading Charges in India 

There are numerous stockbrokers in the Indian financial market that offer various services, platforms, tools, and brokerage charges.

Since the features and functionalities of every broker are different hence the option trading charges in India are quite different too. And the charges in option trading are levied in a very different way when we compare Option Trading Vs Stock Trading. 

Although you can avail this information on their official sites however it is a bit complicated which is why we are providing an easy way to know the fees of different full service and discount brokers available in India.

So, let’s quickly know the option trading charges of some of the Best Stockbrokers for option trading namely Zerodha, Motilal Oswal, 5paisa, Upstox, Angel Broking, and HDFC Securities.

Let’s start our journey with many traders’ favorites- Zerodha! 

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Zerodha Options Charges

Zerodha is one of the well-known discount brokers in India that was founded in 2010 and is prestigiously known for its advanced trading platforms such as Zerodha Kite, Kite Connect, Zerodha Pulse, Zerodha Streak, Zerodha Pi, etc.

Apart from this, Zerodha is one of the topmost choices for educational information available on its online portal named as Zerodha Varsity.

Through Zerodha, you can invest and trade in various segments such as Equity, Derivatives (Futures & Options), Currency, Commodity, and Mutual Funds.

Now, let’s have a look at the Option trading charges in Zerodha. Below table gives a clear picture of the same: 

 

Hence, if a customer of Zerodha wishes to opt for currency and commodity options then he will be required to pay only 0.03% or Rs. 20 per executed order (whichever is lower) and on the contrary, if he wishes to invest in equity options segment, then a flat value of Rs. 20 per order will be dedicated to his trading account. 

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Option Trading Charges in Angel Broking

Angel Broking is a name that every trader and investor knows in the securities market. If you have a demat account with this stockbroker, then you might be interested in using the option trading.

Surprisingly, they offer different plans as Traditional as well as flat-rate brokerage charges (Angel iTrade Plan) in their online mobile platform- Angel Broking App that has a unique feature called Robo order in Angel Broking. 

Registered with SEBI,  the broker offers safe and reliable stockbroking services to its customers. So, you can invest smartly across the derivatives segment including options to maximize your profit. 

 

Apart from this, option trading charges in Angel Broking include a certain brokerage on exercising, expired, as well as on assigned contracts.

The order value in these trades is calculated on the basis of the Premium amount + Strike Price x Size of trade lot.

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Option Trading Charges in Upstox

Upstox, which was formerly known as RKSV, is a technology-driven discount broker that emerged in 2009 in the securities market.

Upstox is one of India’s growing brokers that offers fast, secure, and transparent services to its customers and tends to provide no brokerage charge for 30 days. 

The charges of option trading in Upstox are shared as below-

 

Hence Upstox charges a flat brokerage charge of Rs. 20 on per executed order from the trading account. Apart from this, Equity Delivery is completely free of cost. 

But, you need to make sure about other Upstox charges that are compulsory for an investor or a trader to pay. 

Upstox offers advanced trading platforms like Upstox Pro, Upstox NEST Trader Platform, Upstox Pro Mobile App, which allows you to trade effortlessly across the options.

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Option Trading Charges in Sharekhan

Sharekhan– who is not familiar with this stockbroker? Being a full service stockbroker, it offers impeccable trading platforms and tools such as Sharekhan Mini, Sharekhan Trade Tiger, Robo Advisor, Sharekhan Research, and also several free education resources based on the stock market of India.

This broker allows its customers to trade and invest in various segments such as derivatives, equities, currency, mutual funds, and commodities.

 

If you opt for equity and currency then you will be required to pay around Rs. 250 on per executed order along with other charges such as STT, transaction charges, service tax, GST (Goods and Service Tax), SEBI charges, and many other charges.

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Option Trading Charges in 5paisa

5paisa was earlier an arm of IIFL Securities or Indian Infoline until 2007. Now, it’s an independent firm located in Thane, Maharashtra, and is a relatively new player in the securities market.

However, within such a short span of time, it has received an excellent response from over 294,850 active clients- according to a survey well-written in Economic Times, 2019. 

With 5paisa, you can invest in Mutual Funds (MFs), Derivatives segment including Futures and Options, and in stocks listed in MCX, NSE, BSE, and NCDEX.

So, if you have a trading and demat account with this broker and want to trade in derivatives, you will be required to pay certain option trading charges. 

Here is the detail of the 5paisa brokerage for option trading.

 

Hence, we can clearly see that 5paisa offers the lowest brokerage option trading charges to its customers with free advisory, world-class research, attractive margin, and one of the best trading apps in India.   

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Motilal Oswal Options Brokerage

Established in 1987, Motilal Oswal is one of the oldest stockbroking houses in the securities market that offers a wide array of products to its customers such as MO Genie, Motilal Oswal Trade, and many more! 

With their strong and robust applications, one can smoothly trade in options trading. Not just this, it’s the first firm to provide a smartwatch app from where you can handle all your trading needs from a single place.

Also with this smartwatch app, important alerts and notifications cannot be ever so quickly!

Just like other prominent brokers, Motilal Oswal (MO) is not away from offering multiple plans to its customers.

The firm offers nine different plans for its customers that entirely depend on the upfront fee to be paid by the investor or trader. 

Now, let’s check the default option trading charges in Motilal Oswal-

 

From the aforementioned table, we can clearly view that trading charges in equity and currency options are Rs. 100 and Rs. 20 respectively per executed order. 

The other plans of Motilal Oswal allow its customers to trade in the 1st and 2nd leg of options by paying Rs. 50 to Rs. 6 on both sides of equity and currency options.

Besides this, there are certain Motilal Oswal Charges that are necessary to be paid by an investor or a trader while executing the deal.

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Option Trading Charges in HDFC Securities

HDFC Securities is a Bank Based full-service stockbroker that offers online as well as mobile (call) trading facilities to its customers. With this broker, you can open a 3-in-1 account (trading, demat, and bank) in a paperless and quick way. 

HDFC Securities is known to be the third-largest broker in the industry in terms of a number of customers. Presently, it has over 889,126 clients.

Now, let’s understand HDFC option trading charges: 

 

Thus, we can say that HDFC Securities charge a pretty high brokerage charge as compared to its peers or competitors. However, with such a price you also get attractive tools, features, and highly robust platforms such as HDFC Securities App and HDFC Securities Blink. 

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Lowest Brokerage Charges in Option Trading

To sum up this article, we can clearly say that 5Paisa offers the lowest brokerage charges in Option Trading. But is that all you require? What about the trading platforms, services, or segments? 

Also Read: Who offers the Lowest Brokerage Charges in India?

Choosing the right broker for options doesn’t mean that it has to

be the lowest one, rather it must be perfect in all spheres- reputation, segments provided, exchanges, platforms, customer care, complaints, etc.

Also, it must be based on your trading and investment goal too. With goal based investing in India, every goal can be achieved with proper planning and research.

The brokers discussed above have performed very well in the market but each of them is different from one another. Before opening a demat account with anyone, make sure you have done a complete analysis on various parameters; not just on fees! 

Option Trading is one of the risky segments in the stock market and becomes much riskier when combined with commodity trading but as said- the higher the risk, the higher the return! 

But Option trading risk can be minimized with adapting right strategies and techniques.

So, make sure that you are well informed about the struggles that you might face while trading in options and before investing in the same have a clear picture of your risk appetite, strategies, and goals. 

Want to trade in Options? For that, you need to have a Demat Account. Refer to the form below