Nithin Kamath of Zerodha sounds alarm on options market, says real hedging is getting harder

-62.3

Market Impact Score

-100 Bearish+100 Bullish

AI Analysis

The shift to weekly options impacts risk management for institutional and retail traders. Reduced liquidity in longer-dated options can amplify market volatility.

Trading Insight

Traders should re-evaluate their hedging strategies and consider the increased cost/difficulty of long-term protection.

Quick check: MARUTI bearish bias (oversold), TATAMOTORS bearish bias (-2.4% 1d).

Key Evidence

•India's options market now dominated by weekly contracts.
•This trend makes long-term hedging harder due to shrinking liquidity in longer-dated options.
•Liquidity issues are particularly evident during market stress.
•Risk flag: Increased counterparty risk due to illiquidity
•Risk flag: Higher hedging costs

People in this Story

Nithin Kamath

mentioned in article

Founder of Zerodha, commenting on options market trends

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