Negative impactOrders & Deals
Only 10% of Option Buyers Make Money. Zerodha's Nithin Kamath Explains Why Higher Taxes Are To Blame
NDTV Profit 2 hrs ago·29 Oct 2026, 5:51 am
Zerodha co-founder Nithin Kamath has highlighted a major reason why most option traders lose money: high transaction taxes. Kamath explained that the current tax structure on Futures and Options (F&O) contracts, particularly those involving crypto, makes it extremely difficult for buyers to profit. He noted that the high cost of trading these contracts, combined with the leverage involved, often wipes out small gains before they can materialize into a win.
This situation matters to investors because it suggests that the current market rules may be discouraging retail participation in the derivatives space. When the cost of entry is too high, traders are forced to take on more risk to break even, which can lead to larger losses. This dynamic creates a challenging environment for those trying to navigate the volatile options market.
Investors should watch for any upcoming policy changes from market regulators. If the government decides to adjust the tax rates on F&O or leverage limits, it could significantly change the profitability of trading options. Keeping an eye on these regulatory moves will be crucial for understanding the future landscape of derivatives trading.
Key takeaways
- Category: Orders & Deals.
- AI reads the tone as negative (potentially bearish) for the stock.
Why it matters
A routine update. The tone is negative — watch for downside reaction. Use the price and stock snapshot to gauge how the market is responding.
