Securities Transaction Tax (STT) is the biggest tax that traders pay, and it's much higher than brokerage fees. At Zerodha, the STT we collect and pass on to the government is higher than the brokerage we earn. Trading volumes are highly sensitive to the STT. The level of STT also affects whether traders trade more in cash equities, futures, or options. There's a lot of concern that Indian options volumes have exploded; I don't think it would be a stretch to say that STT is a big factor in this. Until 2008, the STT on options was based on contract value, making it impossible for anyone to trade options. After that, STT was charged on the premium, and options became more cost-effective compared to futures, and volumes shot up. By the way, the idea of @zerodha came about when the STT for options was brought down to a premium value. The bet was that people would trade more options. It did play out the way we had thought it would. 😬 We've had several STT changes over the years. This has had a more significant impact on cash and futures than on options because STT was on premium value, and on cash/futures, it was on total value. And yes, the introduction of weekly expiry and restriction on intraday leverage for stocks added a lot of fuel to the fire of option trading volumes. So yeah, I wish we had no STT, but I guess that's not a solution. 😃 But if STT were brought down for cash and futures and intraday leverage were increased (from the minimum 20% now to as much as futures), I think the trading volumes in cash and futures would automatically go up. It is a much better strategy to increase cash/futures volumes than to reduce trading volumes in options.