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Zerodha founder Nithin Kamath has issued a stark warning on the limits of risk management after an unprecedented collapse in commodity markets left traders and brokers exposed to losses beyond initial margins. \u00a0<\/p>
In a post on X (formerly Twitter), Kamath said violent market moves on rare occasions can render traditional risk controls ineffective, creating situations where traders lose more than they deposit and brokers are left with no immediate safeguards. \u00a0<\/p>
\u201cYesterday was one of those days in commodity markets,\u201d Kamath wrote, describing a session where \u201call major metals hit lower circuits \u2014 the maximum they can move in a day.\u201d \u00a0<\/p>
According to Kamath, silver prices plunged by nearly 30%, while gold fell around 15%, triggering lower circuit limits across the metals complex. In contrast, natural gas moved in the opposite direction, hitting its upper circuit. \u00a0<\/p>
A once-in-a-generation kind of shock \u00a0<\/strong><\/p> Kamath noted that in Zerodha\u2019s 16 years of operations, the firm has witnessed such extreme conditions only once before \u2014 during the COVID-19 crisis, when crude oil prices famously turned negative. Even then, the disruption was limited to a single commodity, at a time when commodity trading participation was far lower than it is today. \u00a0<\/p> \u201cThis time, it was across major metals,\u201d Kamath said, underscoring the scale and rarity of the move. \u00a0<\/p> The episode, he added, serves as a reminder that extreme dislocations are not confined to commodities. Equity markets, too, can experience similar breakdowns in liquidity and price discovery, as seen during the global financial crisis of 2008. \u00a0<\/p> When margins and exits fail \u00a0<\/strong><\/p> Kamath highlighted a critical but often overlooked risk in leveraged trading: when markets gap sharply and hit circuit limits, there may be no margin calls and no exit opportunities. \u00a0<\/p> \u201cWhen markets move so violently that traders lose more than their entire initial margin, both the trader and the broker are sitting ducks with no way out,\u201d he wrote. \u00a0<\/p> Such scenarios expose the structural vulnerability of leveraged trading, where even well-designed risk management systems can fail under extreme stress. \u00a0<\/p> A blunt warning to traders \u00a0<\/strong><\/p> Kamath concluded with a cautionary message for retail participants drawn to fast-moving markets and leverage. \u00a0<\/p> \u201cThe lesson is simple but critical: only trade with money you can afford to lose,\u201d he said, warning that years of consistent profits can be wiped out in a single session if risk is not managed conservatively. \u00a0<\/p> \u201cYou can trade successfully for a decade and lose it all in a single day,\u201d Kamath added. \u00a0<\/p> Silver witnessed one of the sharpest collapses in modern commodity market history. On MCX, March silver futures plunged \u20b91,07,968 per kg, or 27%, to settle at \u20b92,91,925, marking the steepest single-day fall ever recorded for the metal. The crash dragged prices below the \u20b93 lakh mark just a day after silver had surged to an all-time high near \u20b94 lakh per kg.\u00a0<\/p> Globally, the selloff was even more violent. Spot silver crashed as much as 37%, the largest single-day decline on record, while COMEX silver futures slumped over 30%, their worst fall since March 1980. Prices collapsed from record highs above $120 an ounce earlier in the week to nearly $80 in one trading session.\u00a0<\/p> <\/div> Disclaimer: Business Today provides stock market news for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.<\/i><\/p> Nithin Kamath, Zerodha, commodity market crash, silver price crash, gold price fall, lower circuit commodities, risk management trading, margin trading risk, commodity trading India, metal market rout#lose #day #Nithin #Kamaths #blunt #warning #silver #gold #shock1769885944<\/p> ","protected":false},"excerpt":{"rendered":" Zerodha founder Nithin Kamath has issued a stark warning on the limits of risk management after an unprecedented collapse in commodity markets left traders and brokers exposed to losses beyond initial margins. \u00a0 In a post on X (formerly Twitter), Kamath said violent market moves on rare occasions can render traditional risk controls ineffective, creating […]<\/p>\n","protected":false},"author":1,"featured_media":2577,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[37],"tags":[7696,7686,7691,2985,2011,7687,7695,7693,7688,7690,7692,7694,7684,7689,7697,3062,7328,3741,7685],"class_list":["post-2576","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-content-marketing","tag-blunt","tag-commodity-market-crash","tag-commodity-trading-india","tag-day","tag-gold","tag-gold-price-fall","tag-kamaths","tag-lose","tag-lower-circuit-commodities","tag-margin-trading-risk","tag-metal-market-rout","tag-nithin","tag-nithin-kamath","tag-risk-management-trading","tag-shock","tag-silver","tag-silver-price-crash","tag-warning","tag-zerodha"],"acf":[],"_links":{"self":[{"href":"http:\/\/longzhuplatform.com\/index.php?rest_route=\/wp\/v2\/posts\/2576","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/longzhuplatform.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/longzhuplatform.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/longzhuplatform.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/longzhuplatform.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=2576"}],"version-history":[{"count":0,"href":"http:\/\/longzhuplatform.com\/index.php?rest_route=\/wp\/v2\/posts\/2576\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"http:\/\/longzhuplatform.com\/index.php?rest_route=\/wp\/v2\/media\/2577"}],"wp:attachment":[{"href":"http:\/\/longzhuplatform.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=2576"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/longzhuplatform.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=2576"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/longzhuplatform.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=2576"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}