Nithin Kamath slams flawed comparison between India and US in candid post, says ‘Gambling runs deep in American culture'. Netizens applaud

Economic Times

2 days ago

Agencies Zerodha's Nithin Kamath sparked debate by contrasting India's options trading with the US, cautioning against superficial comparisons. He emphasized that India's market is less leveraged and still developing, unlike the US, which he characterized as having a deep-rooted gambling culture.
In a bold and unfiltered post that's making waves across financial circles, Zerodha co-founder Nithin Kamath has challenged what he calls a 'misguided narrative' comparing India's options trading volumes to those of the United States. And he isn't mincing words. Kamath took to social media this week, highlighting stark contrasts in market maturity, investor behavior, and cultural ethos—concluding with a punchline that's hard to ignore: 'Gambling runs deep in American culture.' The remarks, which appear in a now widely circulated LinkedIn post, reflect growing concerns over surface-level interpretations of trading data, especially as India's retail participation in stock markets continues to surge.
At the heart of Kamath's argument is the assertion that Indian markets are not dangerously overleveraged, as some analysts and commentators suggest. He notes that most comparisons rely on the sheer number of options contracts traded, without factoring in premiums or actual capital value. 'If anything, India is significantly less leveraged than the US, even taking into account the fact that our markets are 15–20 years behind theirs,' Kamath wrote in his post.
To drive home the scale of difference, Kamath pointed out that the margin funding market in the US recently crossed $1 trillion. In India? It's still under $10 billion—just 1% of that. Likewise, while shorting is a trillion-dollar mechanism in the US, India's stock lending and borrowing market remains in its infancy.
— Nithin0dha (@Nithin0dha)
Kamath's most eyebrow-raising observation, however, came from outside the trading world—sort of. Referring to a bizarre $210 million wager on whether Ukrainian President Volodymyr Zelensky would wear a suit to the NATO summit, Kamath underlined how deeply embedded gambling is in the American psyche. 'From the stock market to sports, casinos, events, lotteries, prediction markets, and crypto, you can bet on anything,' he said. 'Calling the US a gambling society wouldn't be unfair.' Kamath's comments have ignited a spirited conversation online, with many users rallying behind his take. One user wrote, 'We actually cannot compare Indian markets with the US… the biggest companies in the US are still growing fast, but fractional investing will change the Indian market.' Another comment struck an optimistic tone: 'In the US, approximately 62% of the population has stock market investments, whereas in India, it's only 6%. India could be a sleeping giant waiting to awaken.' Other users praised Kamath for drawing attention to the importance of measuring real leverage over superficial contract counts. 'Comparing contract numbers without looking at actual value is like counting cars without checking if they're Ferraris or Fiat Puntos,' one quipped. Kamath's broader point is that while India's markets are evolving rapidly, they are still in a formative phase—and that's no reason to ring alarm bells. He argued that overzealous comparisons with mature markets like the US not only lack nuance but risk misleading retail investors and policymakers alike. 'We're still building basic infrastructure,' another netizen commented. 'Our regulators are right to be cautious given how new retail participation is. Better slow growth than 2008 crashes.' Whether one agrees or disagrees with Kamath's framing, one thing is clear: the story of India's financial markets cannot—and should not—be told through the lens of another nation's gambling habits.