Countering criticism about India’s growing options trading volumes, Zerodha Founder & CEO Nithin Kamath has said that concerns about India being “overleveraged” are not just misplaced but also based on flawed comparisons with the United States.
In a post on X (formerly Twitter), Kamath wrote, “It’s ridiculous to see people comparing options trading volumes in India and the US and claiming that we’re overleveraged. For starters, the comparison itself is flawed. People often look at the number of contracts traded, not the premiums or the actual value involved.”
Kamath highlighted that India’s financial markets are 15-20 years behind the US in terms of maturity, and yet operate with significantly lower leverage. “In the US, the margin funding market (the equivalent of MTF in India) recently crossed $1 trillion. In India, it’s still under $10 billion — just 1% of that,” he said.
He further noted that while US stock markets see around $1 trillion worth of short positions, India’s stock lending and borrowing activity remains “practically insignificant.”
Taking a sharp dig at America’s speculative culture, Kamath remarked, “Calling the US a gambling society wouldn’t be unfair. Just recently, there were bets totaling $210 million on whether Zelensky would wear a suit at the NATO summit.”
He concluded that the narrative suggesting India is dangerously overleveraged is “misguided,” especially when based solely on contract counts in options trading. “If you compare our leverage as a country to that of the US, we’re a mere drop in the ocean,” he wrote, emphasizing that speculative behavior is far more ingrained in American financial and cultural systems.
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