Markets: A Rigorous Course

M01 · Problem 5 ★★ Check

Short-side break-even

For an intraday short (sell QQ at PP first, buy back at P−ΔP - \Delta), STT is charged on the opening (sell) leg and stamp duty on the closing (buy) leg. Using the notation of (1.3), derive the break-even Δshort∗\Delta^*_{\text{short}} and compare it with the long break-even (1.4) for P=₹1,500P = \text{₹}1{,}500, Q=100Q = 100. Which is larger, and why is the difference so small?

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Commas, ₹, % and 1e-3 notation are accepted.

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