After 40% hit from F&O curbs, Zerodha's Nithin Kamath warns of brokerage pivot if weekly options expiry ends

Having already taken a hit from a slew of regulatory measures in the futures and options arena, Zerodha said it might now be forced to take a brokerage pivot if regulators go ahead with their reported plan to curb or even scrap weekly options. In a blog, India’s leading brokerage said it may be forced to charge brokerage fees on equity delivery trades in such an eventuality.

In a candid note, Zerodha founder and CEO Nithin Kamath admitted the options-heavy revenue model is under severe stress.

"Regulatory actions, be it the drop in transaction charges revenue, the increase in securities transaction tax (STT) on F&O, the proposal to make futures and options trading tougher, ASBA for trading, the increase in BSDA limit, etc., will have a significant impact on our revenues and profitability. The time has finally come for business to pivot," he wrote.


Weekly index options account for the bulk of retail activity in derivatives, and brokers like Zerodha have long relied on high trading volumes in this segment to keep their zero-brokerage delivery model sustainable.

But with the government raising the STT, exchanges removing fee rebates, and regulators tightening intraday F&O norms, the pressure has been mounting.

The latest worry is talk of regulators evaluating a complete halt to weekly options trading. Kamath warned that if this happens, Zerodha would have little choice but to start charging for equity delivery trades, something it has so far kept free to attract millions of first-time investors.

The impact of various curbs since October last year is already visible in numbers. According to Kamath, Zerodha’s brokerage revenues in the June 2025 quarter might take a hit of 40% compared to the same period last year. New account openings have also slowed in line with softer market activity, even after the broker scrapped account opening fees in 2024.

Still, the firm retains nearly 10% share of all retail and HNI assets in India and has grown its margin trading facility (MTF) book to about Rs 5,000 crore within nine months.

"Market cycles trump a lot of business decisions," Kamath said, noting that the firm’s long-term philosophy and lack of external investors allow it to ride through downturns.

For retail traders, a potential ban on weekly options could significantly reduce opportunities for short-term bets. While the move may lower systemic risk, it would also shrink the speculative turnover that keeps brokerage firms profitable.

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