What did Nirmala Sitharaman announce regarding STT in the 2026-27 Union Budget?

Union Finance Minister Nirmala Sitharaman announced a hike in the Securities Transaction Tax (STT) for futures and options trades in the 2026-27 Union Budget.

What is the policy signal behind the STT hike on derivatives?

Market experts believe the STT hike is a direct policy signal against high-frequency and ultra-short-term trading strategies.

How will the STT increase affect the derivatives market?

The increase in STT is expected to impact trading volumes and liquidity in the derivatives segment.

Home / Business and Economy / STT Hike Targets High-Frequency Trading

STT Hike Targets High-Frequency Trading

1 Feb

•

Summary

Securities Transaction Tax hike announced in Budget 2026-27.
Move signals policy shift against rapid trading strategies.
Experts predict impact on trading volumes and liquidity.

In the Union Budget for 2026-27, Union Finance Minister Nirmala Sitharaman revealed an increase in the Securities Transaction Tax (STT) applicable to both futures and options trades. This fiscal measure has been met with significant attention from market analysts and participants.

Market experts, including Sunil Sanghai of NovaaOne Capital, Naveen Kulkarni of Axis Securities PMS, and Amit Gupta of Motilal Oswal Private Wealth, interpret this STT hike as a clear policy directive. The intention appears to be a discouragement of high-frequency trading and other ultra-short-term trading strategies that have become prevalent in recent times.

Consequently, this policy adjustment is expected to influence the dynamics of the derivatives market. Analysts foresee potential impacts on trading volumes, which might decrease, and on market liquidity, which could also be affected as a result of the revised tax structure.

This story has been auto-aggregated and auto-summarised by a computer program. This story has not been edited or created by the Feedzop team.