Regulatory risk is the biggest risk for brokers, says Zerodha's Nithin Kamath

Nithin Kamath, co-founder and CEO of Zerodha, in a post on social media platform X said he is "as clueless as everybody else" regarding where weekly options are heading, but added that he "would not be surprised if they were banned completely" or brought under a product suitability framework that makes it harder for people to trade F&O.

"Regulatory risk is by far the biggest risk for brokers like us," Kamath wrote in a post on X. “This risk is magnified even more because most brokers’ earnings are from traders, and they earn almost nothing from investors," he added.

He outlined stock exchange data showing that option volumes have already fallen nearly 40% in a bull market since the number of weekly expiries was cut to two. If the remaining expiries are removed, he warned, volumes could return to 2019 levels.

Many

people have been asking me about my view on weekly options and whether they are going away. I am as clueless as everybody else. ???? Having said that, I would not be surprised if they were banned completely, and/or if there is some product suitability framework that makes it… pic.twitter.com/TRFLx9yONL

— Nithin Kamath (@Nithin0dha) September 15, 2025

For Zerodha, this is particularly significant as the brokers do not charge commissions on mutual funds and a nominal amount from long-term investors. “We are just biding time before we will be forced to make a change,” Kamath said.

On the broader policy question, Kamath said, "As the CEO of a brokerage firm, I would say weekly expiries with a product suitability framework sound reasonable to me. But if I were an outsider, I would understand the logic behind completely removing weekly expiries".

Earlier in July, Kamath had dismissed comparisons with the US derivatives market, calling them "flawed". While India is often seen as overleveraged because of its large options trading volumes, Kamath noted that the real exposure is far smaller than in the US.

Kamath’s remarks come at a time when the Securities and Exchange Board of India (SEBI) is likely scrutinising India’s booming derivatives market, which has seen a surge in retail participation. According to sources, SEBI is likely to float a consultation paper within the next month to consider ending the weekly F&O contracts.

SEBI Chairman Tuhin Kanta Pandey, on August 21, had first mentioned about the regulator exploring longer tenor derivative products.