Budget 2026 and the STT hike: can taxes kill trading?

#Budget2026 & the #STT Shock: Can Higher #Taxes Kill #Trading?
During the Budget 2026 speech, the Finance Minister announced an increase in STT, and the markets didn’t take it lightly.
Major Indices fell by over 2% in a single day!

The narrative was clear:
- Higher STT would reduce speculative trading
- Trading would become costlier for retail investors
- Especially when SEBI data shows ~90% of retail traders lose money

But will this actually stop trading? I don’t think so!
Because trading isn’t just a financial activity, it’s an #addiction!

Why do I say that?
A few months ago, one of my #carpool partners was a newbie trader. Every commute came with discussions on profits, losses, and “next big trades.”

After a few weeks’ gap, I asked how trading was going.
Silence.
She eventually opened up about heavy losses in the F&O segment.

My obvious question: “Have you quit trading?”
Her reply was honest: “I’ve reduced it, but I can’t quit completely. I always feel the next trade will help me recover my losses.”
Did she recover them? Not really.
But she hadn’t made major losses either by being more conservative and exiting quickly.

This behaviour showed up in the markets too.
The market fell 2% on Day 1
Recovered 1% the very next day
A full recovery doesn’t seem far-fetched

Whether we like it or not, trading behaves like cigarettes.
Even after repeated tax hikes, consumption never really drops!
Higher STT may slow things down temporarily, but it won’t cure the addiction.