Introduction
Are you thinking about venturing into the world of options trading? ICICI Direct, one of India’s leading financial institutions, offers a comprehensive trading platform that includes the option to trade options. However, before you dive in, it’s essential to understand the charges associated with option trading on ICICI Direct. This article delves into the details of ICICI Direct option trading charges, providing you with a comprehensive guide to help you make informed decisions.
Image: sbnri.com
Transaction Charges
When you place an option trade on ICICI Direct, you incur a transaction charge that depends on the premium amount of the option you buy or sell. The transaction charge comprises two components: the base charge, which is a flat fee, and the premium-based charge, which is a percentage of the premium amount. The base charge for each option buy or sell order is Rs.20 or a minimum of Rs.500 per order, whichever is higher.
Premium Range | Premium-Based Charge
Up to Rs. 100,000 | 0.05%
Rs. 100,001 to Rs. 500,000 | 0.04%
Rs. 500,001 to Rs. 1,000,000 | 0.03%
More than Rs. 1,000,000 | 0.02%
Example:
Let’s say you wish to buy an option with a premium amount of Rs. 50,000. The base charge will be Rs.20. The premium-based charge will be 0.05% * Rs.50,000 = Rs. 25. So, the total transaction charge for this trade will be Rs. 20 + Rs.25 = Rs. 45.
Custody Charges
ICICI Direct also charges a custody fee for holding the options in your demat account. The custody charge is an annual fee that is calculated based on the value of the options held in your account. The custody charge is payable upfront yearly. Below is the fee structure for the custody charge.
Value of Options in Demat | Annual Custody Charge
Up to Rs. 50,000 | Nil
Rs. 50,001 to Rs. 100,000 | Rs. 125
Rs. 100,001 to Rs. 500,000 | Rs. 250
Rs. 500,001 to Rs. 1,000,000 | Rs. 500
More than Rs. 1,000,000 | Rs. 1,000
Image: www.youtube.com
Example:
If you hold options worth Rs. 75,000 in your ICICI Direct demat account, the annual custody charge payable will be Rs. 125 (as per the table above).
Other Charges
- Exercise Charges: When you exercise an option, you incur an exercise charge of Rs. 20 per option contract.
- Conversion Charges: If you convert an option contract into shares, ICICI Direct charges a conversion charge of Rs. 20 per contract.
- Demat Charges: ICICI Direct charges a demat debit and credit charge of Rs. 15 per debit or credit. This charge is applicable when you transfer options to or from your ICICI Direct demat account.
Icici Direct Option Trading Charges
Conclusion
Understanding the charges associated with option trading on ICICI Direct is crucial for making informed trading decisions. By carefully considering the details outlined above, you can estimate the potential costs involved in your option trades accurately. Remember that charges may vary based on market conditions and ICICI Direct’s fee policies. It is advisable to stay updated with the latest fee structure by regularly visiting the ICICI Direct website or consulting with your financial advisor. By embracing a comprehensive understanding of option trading charges, you can optimize your trading strategies and navigate the market complexities effectively.
