Do Not Exercise (DNE) option

Sun, 21 Jun 2026 00:00:00 +0000

Do Not Exercise (DNE) was a facility that let a broker instruct the clearing corporation not to exercise an in-the-money, close-to-money (CTM) option strike on a client’s behalf at expiry, introduced by the exchanges in August 2017 and discontinued for CTM strikes by the National Stock Exchange from 14 October 2021. It existed to protect option buyers from two problems at expiry: the securities transaction tax (STT) trap on exercised options, and an unwanted physical-delivery obligation on a marginally in-the-money stock option. This article explains the CTM framework DNE operated on, the STT rationalisation that removed its original purpose, the timeline of its withdrawal, and the current position on auto-exercise of in-the-money options at Zerodha .

DNE on WebNotes

Do Not Exercise (DNE) option