'She was wild and mysterious': Zerodha's Nithin Kamath writes a playful 'obituary' for volatile Bank Nifty Weekly

In a humorous twist, Nithin Kamath, founder of Zerodha, crafted a heartful yet witty farewell to a beloved financial instrument this week. The spotlight was on the Bank Nifty weekly contracts as Kamath shared a playful "obituary" on social media, honoring what has become a staple in India's dynamic options market since its debut in 2016.

The tribute highlighted the contract’s unique volatility and appeal among traders, marking the end of a popular financial tool in India’s options market. Bank Nifty Weekly, a trading staple launched in 2016, gained traction as a go-to choice for retail traders in India, especially during the pandemic.

Kamath’s farewell note, shared from a long-time trader friend, said, “She was wild and mysterious, leaving us speculating about her every move.” It added that “7% of us” were enriched by Bank Nifty Weekly, acknowledging that the majority — “93% of traders make losses from F&O trading” — struggled with it. He closed by remarking, “Wednesdays will never be the same without her.”

Regulatory Changes Prompt End of Bank Nifty Weekly

The exit of Bank Nifty Weekly follows new guidelines from SEBI, India’s market regulator, aimed at curbing speculative trading. Under the latest regulations, each exchange can only offer one weekly contract, leading the National Stock Exchange (NSE) to retain the Nifty 50 weekly contract, ending Bank Nifty Weekly. SEBI’s move is intended to protect retail investors and direct savings back into the economy, reflecting a shift in India’s trading environment.

Impact on Zerodha and India’s Options Landscape

For Zerodha, the change brings potential challenges. Kamath has noted that Zerodha’s trading volumes in futures and options could drop by as much as 60% due to the new rules. Bank Nifty Weekly had captured nearly a third of India’s index options volume, contributing significantly to India’s standing as a leader in the global options market. Its departure marks a major shift in the Indian trading scene, signifying the regulator’s stance toward safer, more sustainable trading practices for retail investors.