Zerodha's Nithin Kamath Shares 'Trick' To Not Lose Money Due To Market Volatility

One can trust Zerodha CEO and co-founder Nithin Kamath to share some valuable advice about investments and the stock market. On Wednesday, Kamath described active trading as the “toughest way to make easy money in life”. He wrote, “The trick to being a successful trader is to survive the bad days.” He added that in the past year, many traders were caught off guard by sudden spikes in the market.

Nithin Kamath suggested that one way to ensure that you don’t lose money due to market volatility is to “trade in fully hedged options strategies, such as spreads”. He linked an article written by Abid Hassan, the CEO and co-founder at Sensibull, an investment and trading platform. Hassan’s article argued that people should opt for spreads such as Bull Call Spread, Bear Put Spread and Iron Condors as “they are safer, easier to trade”.

Kamath concluded, “Of course, this alone won’t help. You also need to ensure that you have a strategy to manage risk, size your positions appropriately etc.” His post got over two lakh views and hundreds of likes.

While many people agreed with Nithin Kamath’s advice, a few disagreed with him. An X user straight out chided him by suggesting that “trading” as a skill is developed with experience or instinct as opposed to learning from a “guide”. Expressing this opinion, the X user said, “A trader buying a step-by-step guide to becoming a “profitable” trader is equivalent to a painter buying a step by step guide to becoming a “creative” painter.”

Another person refused Kamath’s suggestion and promoted conventional money saving methods. The X user wrote, “The quickest way to double your money is to fold it and put it back into your pocket. Chasing quick money is the surest way of losing money quickly.’

In follow up to this post, Kamath linked one of his posts from 2021 that said, “The one thing that retail traders don’t do which they should – vary bet size. Trade with as little as possible on 90% of trades. Trade with more only when the odds of being profitable are higher.”

Nithin Kamath has become a significant name in the world of equity investments and stock trading. He co-founded Zerodha in 2010 with his brother Nikhil Kamath. Today, Zerodha claims to be one of India’s biggest stock broker companies. It is headquartered in Bengaluru.