Zerodha CEO Nithin Kamath's tip to stock traders on risk management: Only use money you can...

Zerodha co-founder and CEO Nithin Kamath's advice proved far-sighted as only a day after he shared his tip, markets crashed.

Zerodha co-founder and CEO Nithin Kamath has shared a cautionary note for India’s growing base of retail traders after a dramatic weekend of market turbulence. In a post shared on Saturday, Kamath described how commodity markets collapsed in a way that overwhelmed risk management systems, leaving both traders and brokers exposed.

“All major metals hit lower circuits—the maximum they can move in a day. Silver crashed 30 percent, gold 15 percent, and others followed. Natural gas was on an upper circuit,” Kamath wrote, adding that such violent moves are rare but devastating. "In our 16 years of operations, we've only seen something like this once before: when Crude oil closed at a negative price during COVID. But that was just one commodity, and commodity trading wasn't nearly as popular as it is today. What happened in commodities yesterday can happen in equities too; we saw it in 2008."

The Zerodha boss warned that when markets gap through circuits, “there’s no margin call, no exit opportunity.” His advice was blunt: only trade with money you can afford to lose. “You can trade successfully for a decade and lose it all in a single day if you’re not properly managing risk," he said.

The timing of his warning proved far-sighted.

Just a day later, on Sunday, Finance Minister Nirmala Sitharaman's Union Budget 2026 triggered sharp volatility in equities. The Sensex climbed to an intra-day high of 82,726.65, slipped to 80,931.41, down 1,338.37 points in the afternoon. The broader Nifty moved up to 25,440.90, gaining 120.25 points in the morning, only to decline to 24,826.25, down 494.40 points by 12.30 pm.

Profit booking, disappointment over the lack of tax relief for individuals, and concerns about fiscal deficit and borrowing plans were cited as key reasons for the decline.