Over a decade of trading the markets for a living.  Felt the fatigue, and with Zerodha decided to be the catalyst for change and started a brokerage firm that traders didn't have. 
Musings on finance, business, and life: https://nithinkamath.me/

Nithin Kamath

In the next release, we @ Zerodha won't even ask for storage permission. 


Image: Mint, link in comments.

Founder & CEO at Zerodha & Rainmatter. Learning at Rainmatter foundation. Views are personal. Nothing here is advice.

Indian stock exchanges are closed today for Mumbai's municipal elections.

The fact that our exchanges, which have international linkages, are shut down for a local municipal election shows poor planning and a serious lack of appreciation for second-order effects.

As Munger said: "Show me the incentive, and I will show you the outcome."
The holiday exists because no one who matters has any incentive to oppose the market holiday.

It also tells you how far we have to go before global investors take us seriously.

The number of full-fledged Free and open-source software (FOSS) products and initiatives coming out of the 4th Phase, JP Nagar (Zerodha Tech), must be unprecedented for a team of its size globally.

All of these projects started as a way to solve problems we faced internally and were then open-sourced. We use them at scale in our stack, and several large organisations and even government departments globally use many of these tools today.

Read more, check the website in the comments.

When a company goes for an IPO, not all shareholders can sell their shares immediately. Certain categories of shareholders like promoters, early investors and ESOP holders have to wait anywhere between 30 days to 18 months before they can sell their shares.

Since these are large shareholders, whenever they sell, there can often be a downward move in the stock price. So if you are buying shares of companies that IPO'd recently, you should track when the lock-in period expires. We now show this in the Kite fundamentals widget under events. This is powered by Tijori .

As a broker, there are rare days when risk management simply doesn't work, when markets move so violently that traders lose more than their entire initial margin. When this happens, both the trader and the broker are sitting ducks with no way out.

Yesterday was one of those days in commodity markets. All major metals hit lower circuits—the maximum they can move in a day. Silver crashed 30%, Gold 15%, and others followed. Btw, Natural gas was on an upper circuit.

In our 16 years of operations, we've only seen something like this once before: when Crude oil closed at a negative price during COVID. But that was just one commodity, and commodity trading wasn't nearly as popular as it is today.

What happened in commodities yesterday can happen in equities too; we saw it in 2008.

The lesson is simple but critical: only trade with money you can afford to lose. You can trade successfully for a decade and lose it all in a single day if you're not properly managing risk. There's no margin call, no exit opportunity when markets gap through circuits like this.

Two years ago, we met a group of women in Chikkodi, Belgaum. Many were in debt. Some had never thought about savings or budgeting. We spent 2 days together learning the basics of financial literacy through Zerodha Varsity with the help of Svatah: Education Foundation and Pankh India Foundation.

But instead of stopping there, we kept in touch and continued helping them for 2 years. Today, most of these women are debt-free.
For someone from a low-income background, that's true financial independence.

This is why we do what we do. 😀

Saturday, 7 PM at the festival, almost 3,000 people - after a full day of workouts and workshops on health and nutrition, the energy was electric, not depleted.

There was absolutely no alcohol. India is one of the few countries where alcohol consumption hasn't declined in recent years. I think it's inevitable, though, and this was a clear sign.

The idea behind hosting this peakst8 festival was to test openness to health-centred events. The feedback: a resounding yes. Bringing it to more cities.

The excitement and enthusiasm among people with disabilities running the Tata Mumbai Marathon today were beyond words. Makes you think about what right you have to complain about anything in life.

On a personal note, Seema (wife, see the link in comments) ran 10km in ~57 minutes, about 2.5 years after surviving cancer. 😃

There's a lot of pessimism about India's growth prospects right now, amplified by the sheer amount of geopolitical drama we're living through. But if we aren't hopeful that India will do better, then everything becomes moot.

This isn't to say we don't have real problems. We do. But every successful country has had to deal with its own share of thorny challenges along its development path. What matters is how we respond.

Today is National Startup Day 🇮🇳, and I can't think of a better time to build something in India, and for the world, despite all the challenges. While it's okay to be pessimistic or cynical at times, India has come a long way considering the constraints it has faced. Could it have gone even further? Sure. But it's better to think about things as they are, rather than as they should be, and then work toward what they could be.

I'm saying this because we are truly living in unprecedented times. The world order is being redrawn geopolitically, economically, and technologically. It's hard to even describe all the monumental shifts happening around us. But massive shifts create massive opportunities for entrepreneurs who can see them coming.

And there's never been a better time specifically to build in India. If I were tweeting this in 2015-16, the startup scene barely existed outside of a few big e-commerce companies. There were no local pools of capital. No recognition. People genuinely thought startups were what you did if you had no other skills in life.

Today, everything has changed. We're living in a world where every country is focused on its own self-sufficiency, and the era of unchecked globalisation is over. For India, this means we have all the enabling factors in place: improving ease of doing business, deeper pools of local capital (especially long-term investors), a massive domestic market, and active government support for startups.

Most importantly, AI has dramatically reduced the barriers to experimentation. You can now build and test ideas that would have required entire teams and massive budgets just a few years ago.

Given all of these converging factors, if you've always had a dream to build something, there's never been a better time to take your shot.

We, Zerodha, have ~40k NRI customers with an average account value of ₹40L, nearly 10x our overall average of ₹3.6L for resident accounts. Most of them opened accounts the hard way, with physical paperwork. If onboarding were fully online, this base would be much larger.

SEBI recently made changes that have allowed us to significantly simplify Non-PIS NRI accounts: they now work like resident accounts, with fully online Aadhaar-based onboarding (when visiting India) and intraday, BTST, and F&O access with no need for a CP code. We've also reduced the brokerage from ₹100 to ₹50 per order.

For context: NRIs can open NRO (without PIS) or NRE accounts to invest in India. NRE accounts allow repatriation of funds to your country of residence, but are more complex to operate. NRO (Non-PIS) accounts are simpler to open and operate, though repatriation is capped at USD 1 million per year. 

Hoping to see more NRI capital flowing back into Indian businesses.🤞

As a market participant, I always hope the budget will reduce STT, but it keeps going up. STT was introduced when LTCG was made 0, but now that LTCG is back... 😬

The 60% F&O STT increase from Budget 2024 (0.0125% → 0.02% on futures and 0.0625% → 0.1% on options) didn't impact volumes much at first, the bull market continued with surging participation. But markets don't always have bull runs; the impact showed up in the year we just had.

Projected STT collection for FY 2025-26 was ₹78k crores. Collection so far (until Jan 11) is ~₹45k crores. Even if we estimate another ₹12k crores by March 31, that brings the total to ₹57k crores, almost 25% below the projection. I think the government would've collected a lot more without the 2024 hike. 🙈

Of course, disclaimer: I'll benefit from lower STT, so my opinion is naturally biased.

BTW, the budget is on a Sunday this time, and markets are open. We're one of the few brokers that allow BTST trades on Sunday, and you won't get same-day NAV when buying MFs on Sunday.

Women from indigenous communities in Odisha's Koraput district are mapping their commons — forests, streams, grazing land, and other shared resources they depend on daily.

They're doing this because these commons are disappearing. Water sources are drying up, forest cover is thinning, and there's no clear record of what existed, what's already lost, or how the change happened.

So they went looking for answers. They pulled government records from the 1960s and walked the land, documenting what exists today. The findings are stark: common areas have shrunk by up to 25%, ponds and entire chunks of wooded areas have vanished. Tubers, fruits, and medicinal plants that they once harvested are now scarce or locally extinct.

In these communities, it's the women who gather fuel, fodder, and water, and manage household food supplies. So when forests degrade, or water tables fall, they're the first to notice the impacts on daily life, and these women decided not only to track the past but to do something about it themselves.

These citizen-created maps not only allow tracking the past but also set an aspiration for the future. They document what is lost and what needs to be restored.

We work with partners like Common Grounds, Asar, Wassan, Socratus, and Corestack through Rainmatter Foundation to support initiatives like these.

Check the links to know more in the comments.

Access to information is what drives prices in markets. While there's no shortage of information today, the real challenge is figuring out what actually matters and getting it in time. 

Exchange filings, earnings, management commentary, and conference calls. When something material comes out, prices react almost instantly. The faster you get the information, the better your odds of reacting sensibly. 

Institutions and high-frequency trading desks scan exchange filings the moment they're published and act within milliseconds. Retail investors usually find out much later—by then, the price has often already moved. 

Tijori just released the WhatsApp alerts feature. It tracks exchange filings, earnings releases, conference calls, management guidance, verified company tweets, and anything that could materially impact a stock. The moment something is published, it's summarised using AI and sent to you on WhatsApp within seconds. 

For traders, this means getting access to critical filings during market hours, well before traditional news or media picks them up. 

For investors, it’s a simpler way to stay informed without having to search for news for each stock or rely on social media commentary. 

And even if you’re just getting started with investing, work in a company, or run a business, it’s a useful way to track competitors. Follow companies in a sector and get real-time updates of their key announcements and actions. 

You can enable alerts by visiting the Tijori Alerts website (link in comments) or directly from the Kite Fundamentals widget.

Up until a few years ago, commodity trading was more or less an afterthought. Most traders didn't bother with it because liquidity was thin relative to NSE F&O.

But that's changed dramatically, thanks to the spectacular rally in gold and silver. If you look at gold and silver as a percentage of total MCX trading volumes today, the numbers are kind of crazy. A lot of this increase has come at the expense of other commodities like crude.

Our own market share at Zerodha took a hit during this period because we were one of the last brokers to offer the single trading ledger facility—where you can use the same funds in your account to trade across NSE, BSE, and MCX. But it's been steadily inching back up.

Still, it's wild how much volumes have grown. If you'd asked me a few years ago whether this would happen, I'd probably have said no.

Btw, we are working on a few live programs about commodities trading on Zerodha Varsity . 

Link below in comments.

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MTF (margin funding) has grown ~5X in 4 years to ₹110k+ crores, especially after F&O margins and STT increases. But there's something nobody's talking about: there is no real risk model in play for brokers. 😬

Regulations allow up to 5X leverage (20% margin) on many stocks. Competition forces every broker to offer maximum permissible leverage. If you don't, you lose business. Classic race to the bottom.

Unlike F&O, MTF has several risk multipliers:
Clients hold positions for months vs days
1,300 stocks (many illiquid) allowed vs only the top 200 in F&O
All buy positions vs two-way flow in F&O, making risk management much harder
Much harder to manage risk, given all the above. 

By the way, this leverage from MTF becomes insane when you accept stocks as collateral. So, with Rs 1 lakh of stocks, you get a collateral margin of Rs 80k (20% haircut), and with this Rs 80k, you could buy Rs 5 lakh of MTF. 

The structural problem: Indian equities have decent liquidity when markets rise, but it completely dries up during drawdowns. Minimal short-selling (SLB) means almost no natural bid when things reverse. Forced liquidations become self-reinforcing, especially in non-F&O stocks.

SEBI caps MTF at 50% of broker networth + borrowings (or up to 5x networth) to prevent broker defaults. But this potentially protects the system from broker failures, not brokers from client defaults. 

With MTF growing 5X across the industry and everyone at maximum leverage, the next major correction could trigger synchronized liquidations.

We haven't seen a 2008, 2015, or COVID-type event since MTF scaled up. When we do, it will cause mayhem—not because any broker fails, but because forced selling into illiquid markets will cascade.

This will be significantly worse beyond the top 200-300 stocks due to lower liquidity.
Someone asked me what the risk model is. I said there is none. I mean, there is—if "praying" that stocks don't fall counts as a model. 😃

My gut says a lot of what's being earned as interest income, and possibly some capital, of brokers, will all be given back when the market does a quick move down.

Engineer.
Learning Big Data, Analytics and ML.

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