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Nithin Kamath calls for smarter market comparisons; says “India’s financial story can’t be measured by U.S. metrics”
Kamath urged analysts, media and policymakers to consider context, differences in how retail investors behave, how mature the markets are and how financial culture varies across countries.
Kamath urged analysts, media and policymakers to consider context, differences in how retail investors behave, how mature the markets are and how financial culture varies across countries.
Zerodha co-founder Nithin Kamath pushed back against what he called a “misleading obsession” with comparing India’s growing options market to that of the United States.
Instead of echoing popular concerns around high trading volumes, Kamath urged analysts, media and policymakers to consider context, differences in how retail investors behave, how mature the markets are and how financial culture varies across countries.
It’s ridiculous to see people comparing options trading volumes in India and the US and claiming that we’re overleveraged. For starters, the comparison itself is flawed. People often look at the number of contracts traded, not the premiums or the actual value involved.
— Nithin Kamath (@Nithin0dha) July 31, 2025
If… pic.twitter.com/3uMAgllGQD
“The temptation to benchmark India against the U.S. is high,” Kamath wrote, “but doing so without adjusting for capital, leverage and cultural frameworks is not just flawed; it’s dangerous.”
Kamath’s key argument?
India’s derivatives boom isn’t a red flag, it’s a sign of maturing retail interest, but not a reflection of risky leverage. Many of the alarmist takes, he pointed out, fixate only on the number of contracts traded, without accounting for the premiums paid or the overall value at stake.
To illustrate the disparity in financial risk-taking, Kamath cited margin data, while the U.S. margin funding market recently crossed $1 trillion, India’s remains below $10 billion, a mere 1% in comparison. He also noted that sophisticated practices like short selling are still nascent in India, further underscoring that Indian retail trading is less aggressive in nature.
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But the debate didn’t stop at numbers. Kamath’s most pointed critique was cultural. Referencing a $210 million speculative bet on the color of a world leader’s outfit, he argued that financial behavior in the U.S. is deeply intertwined with a culture of speculation.
“We’re building a very different system here,” Kamath asserted, “and that’s not a bad thing.”
One investor remarked, “It’s like comparing a seedling to a full-grown tree and expecting them to bear the same fruit.” Others praised the call for “responsible benchmarking”, especially in a market where retail participation is still at a nascent 6%, compared to over 60% in the U.S.
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