Neutral impactEconomy
Don't Blame CAS: Nithin Kamath Flags High STT, Limited Shorting For Recent Closing Swings
NDTV Profit 2 hrs ago·5 Aug 2026, 1:48 pm
Zerodha co-founder Nithin Kamath has clarified that the recent volatility in Indian market closing prices is not due to the Central Securities Depository (CSDS) margin rules, commonly known as CAS. He suggests the primary driver is the high Securities Transaction Tax (STT) levied on closing trades, which discourages traders from exiting positions at the end of the day. Consequently, many investors hold their stocks overnight, leading to higher open interest and more significant price swings at the market close.
For retail investors, this means the market structure itself is creating artificial pressure on prices. The high cost of STT makes it expensive to square off positions, forcing a buildup of open positions. This structural issue is separate from the regulatory changes and is likely to persist until the tax rate is adjusted. Investors should focus on their long-term strategies rather than reacting to these short-term closing fluctuations caused by tax mechanics.
Key takeaways
- Category: Economy.
- Assessed as a significant, market-relevant update.
Why it matters
A meaningful update worth tracking. Use the price and stock snapshot to gauge how the market is responding.
