In a recent X post, Zerodha CEO Nithin Kamath warned that regulatory tweaks designed to curb derivatives speculation may be backfiring.
Kamath cited that just 10% of individual options buyers are profitable, versus 40% of option sellers and 50% of futures traders.
The shift stemmed from a rising securities transaction tax on futures, pushing activity to options that now account for roughly 90% of F&O volume.
Contract sizes for futures and option selling have ballooned, inflating margin requirements while option buying only demands premium payment. Weekly expiries have compressed trading horizons, nudging traders toward short‑term bets.
Kamath also flagged the surge in crypto derivatives, noting platforms offering up to 300× leverage in a largely unregulated space.
He urged regulators to weigh second‑ and third‑order effects, warning that tightening measures could push traders into riskier arenas and erode liquidity during market stress.