Archive · 23 Aug 2026
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.
Nikhil Kamath compared the broking industry’s F&O exposure with ITC’s earlier dependence on tobacco.
Kamath said F&O trading is harmful for almost 99% of retail traders and is unlikely to be banned outright.
A Securities and Exchange Board of India study found 93% of individual equity-F&O traders lost money between FY22 and FY24.
Those traders collectively lost more than ₹1.8 lakh crore during the three-year period, according to the study.
Kamath said brokers should diversify while their core business remains strong because regulation and taxes may increase.
- Who
- Nikhil Kamath, brokers, retail F&O traders and the Securities and Exchange Board of India.
- What
- Kamath warned that brokers should diversify because F&O trading may face tighter regulation and higher taxes.
- When
- The article does not specify when Kamath made the statement.
- Where
- The discussion concerns India’s broking and equity-derivatives market.
- Why
- Kamath cited substantial retail-trader losses and continuing regulatory scrutiny of F&O trading.
- 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.