Reduce trading size on Budget day: Zerodha’s Nithin Kamath advises caution to traders

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As India gears up for its FY26 Union Budget on February 1, Zerodha co-founder and CEO Nithin Kamath urged traders to exercise caution ahead of the Budget announcement on Saturday, warning of heightened market volatility. Kamath, in a post on X, formerly known as Twitter, advised traders to reduce their position sizes if they cannot refrain from trading altogether on such event-heavy days.

“The budget day is tomorrow, and yes, there is trading on a Saturday. Markets are bound to be volatile, so trade with caution,” Kamath posted on X. “If you are an active trader, I guess you should reduce trading size during event days. That is, if you cannot stop yourself from trading.”



The Indian stock market will remain open for a special trading session on Saturday, February 1, 2025, as Finance Minister Nirmala Sitharaman presents the Union Budget 2025-26, the National Stock Exchange (NSE) and BSE confirmed in a circular issued Monday.Pre-market trading will take place from 9:00 AM to 9:08 AM, while benchmark indices Nifty 50 and Sensex will update live throughout the session. The Union Budget remains a pivotal event for markets, setting the economic agenda for the year ahead.Budget day often brings sharp swings in stock prices, driven by investor reactions to policy announcements. With trading scheduled on a weekend—an unusual occurrence—market participants may face additional uncertainty over liquidity and price action.

Kamath also highlighted that Zerodha will allow traders to execute BTST (Buy Today, Sell Tomorrow) trades despite Saturday being a settlement holiday. “So, there are no restrictions; you could buy something today and sell it tomorrow,” he said.

Indian stock markets typically witness heavy fluctuations during budget announcements as traders and investors react to fiscal policy measures, sectoral allocations, and tax changes. Traders will be looking for cues on fiscal deficit targets, capital expenditure plans, and sector-specific incentives that could drive market sentiment.

Also read | Small and midcap stocks down 15% in 4 months, Nuvama shares 20 bottom-up ideas

(Disclaimer: Recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of The Economic Times)
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