In a post on X, Kamath said cash market activity has not expanded significantly relative to the explosive growth seen in the derivatives segment since 2020. At the same time, Margin Trading Facility (MTF) activity has surged, reflecting rising appetite among retail traders for leveraged positions.
Kamath noted that MTF, in its current form, began emerging around 2019 but witnessed meaningful acceleration after 2022. He added that Zerodha’s own MTF book has expanded substantially during this period and currently stands at nearly Rs 7,400 crore.
According to him, most MTF activity is concentrated on the National Stock Exchange of India, while the rapid rise in options trading over the last three years has been largely driven by the BSE Limited after it aggressively expanded its options offerings beginning in 2023.
The comments come amid growing debate around the rising dominance of derivatives trading in India’s equity markets.
“Since 2020, cash market activity hasn’t grown much relative to options. At the same time, MTF (Margin Trade Funding) activity has significantly increased. MTF as we know it today, began around 2019 and started growing after 2022. MTF is mostly on NSE, and the growth in options activity over the last 3 years is mostly due to BSE (options started on BSE in 2023). Our MTF numbers have also grown significantly during the period; our total MTF book size is approximately ₹7,400 crores today,” the tweet said.
Since 2020, cash market activity hasn’t grown much relative to options. At the same time, MTF (Margin Trade Funding) activity has significantly increased. MTF as we know it today, began around 2019 and started growing after 2022.
MTF is mostly on NSE, and the growth in options… pic.twitter.com/PTPqvKzMEK
— Nithin Kamath (@Nithin0dha) May 7, 2026
The Zerodha co-founder had earlier cautioned traders to look beyond headline interest rates and pay closer attention to brokerage costs, warning that charges can quickly erode returns in leveraged positions. “MTF is booming, but here’s the catch: many traders track the interest rate and ignore brokerage. Brokerage on MTF can add up faster than you think,” Kamath wrote on X, adding that leverage magnifies not just returns but also costs.
MTF allows investors to buy stocks by paying only a portion of the total value upfront, with the broker funding the remaining amount. Investors pay interest on the borrowed portion for as long as the position is held. In a rising market, this can amplify gains. But in volatile or sideways conditions, leverage can also magnify losses.
Kamath’s argument is that many traders focus only on the daily interest rate charged on the funded portion, while underestimating brokerage, which is charged on both buy and sell legs. In shorter holding periods, especially where price moves are small, brokerage can meaningfully impact the net outcome.
Last year, Kamath revealed how company’s MTF business has quietly gained traction despite limited promotion and a late entry into the segment by the discount broker. Despite being one of the last brokers to offer this, Zerodha captured 5% of the market, he had then said.
Read more: Zerodha’s late MTF entry still nets 5% market share but Nithin Kamath flags cost blind spot
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