1 week ago

Nikhil Kamath Urges Brokers to Diversify Amid F&O Risks

Nikhil Kamath compared stockbrokers with ITC, a company that once focused mostly on tobacco.

ITC later expanded into hotels, consumer goods, packaging, agriculture and technology.

Kamath believes brokers may also need to build businesses beyond futures and options trading.

He said F&O trading is bad for almost 99% of retail traders.

A regulator’s study found that 93% of individual traders lost money in equity F&O between FY22 and FY24.

The traders’ combined losses were more than ₹1.8 lakh crore.

Kamath does not expect F&O trading to be banned completely.

He expects stricter rules and higher taxes, so he advised brokers to diversify.

Key facts

Kamath’s assessment: F&O trading is bad for almost 99% of retail traders, according to Kamath.
Regulatory study: The Securities and Exchange Board of India found that 93% of individual equity-F&O traders lost money between FY22 and FY24.
Combined losses: Individual traders’ losses exceeded ₹1.8 lakh crore over FY22-FY24.
Expected policy direction: Kamath expects F&O regulation to become tighter and securities transaction tax to potentially rise.
Recommended response: He advised brokers to diversify while their core business is still performing well.
ITC diversification: ITC entered the hotel business in 1975 and later expanded into FMCG, paperboards and packaging, agri-business and information technology.

businesstoday.in · 1 week ago