Zerodha founder Nithin Kamath bid a witty goodbye to a high-stakes financial instrument this week. Kamath shared a lighthearted “obituary” for the Bank Nifty weekly contracts, a popular tool in the country’s booming options market.
With a nod to the contract’s volatility and mystique, the farewell highlighted the legacy of Bank Nifty Weekly, a trading staple since 2016.
Kamath posted the obituary, penned by an old trader friend, on X, humorously announcing the “passing” of Bank Nifty Weekly on November 13. “She was wild and mysterious, leaving us speculating about her every move,” the message read.
With typical trader candor, it noted, “We are forever enriched by her presence — well, 7% of us; 93% of traders make losses from F&O trading. Wednesdays will never be the same without her.”
The Bank Nifty Weekly, launched by the NSE in 2016, grew from a niche product to a heavyweight in India’s trading scene, capturing nearly a third of index options volume and fueling India’s rise as the world’s largest options market. The instrument flourished, especially during the pandemic, as millions of new retail traders flocked to it, chasing high-reward bets on market movements.
But SEBI, the regulatory body tightening the reins on India’s financial markets, has now mandated a clampdown on speculative trading in derivatives. In a push to safeguard retail investors and redirect savings back into the economy, SEBI introduced limitations that restrict each exchange to a single weekly contract. NSE retained the Nifty 50 weekly, marking the official end of Bank Nifty Weekly.
For Zerodha, the shift is significant. Kamath acknowledged that Zerodha’s futures and options trading volumes could plunge by up to 60% due to the changes. The Bank Nifty Weekly’s exit marks a shift in India’s options landscape, with SEBI’s actions underscoring a new era in Indian trading regulations.