Nithin Kamath's Advice To Retail Traders Ahead Of FM Sitharaman's Budget Speech

The Indian market has seen increased volatility over the last one week, running up to Union Budget 2025. With an array of stances, changes and signals expected from Finance Minister Nirmala Sitharaman in the Budget set to be announced on Feb 1, the market is bound to react.

Given this, trading in large volumes on the day of the Budget may not be the best idea, according to Zerodha's Nithin Kamath.

India's stock market volatility gauge, India VIX, rose over 5% a week ahead of the Budget. Looking back, the trends show mixed moves that were seen during the crucial day. While volatility has risen ahead of several Budget days in the past, the benchmark NSE Nifty 50 has delivered both gains and losses on the day of the announcements and before and after the Budget.

With mixed cues that mark a volatile day ahead, what should traders do? Nithin Kamath has a simple advice to bring to the table.

"So, the budget day is tomorrow, and yes, there is trading on a Saturday. Markets are bound to be volatile, so trade with caution. 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," he posted on X.

"By the way, zerodhaonline is probably the only broker which will allow you to do BTST (Buy today and sell tomorrow) trades on days of settlement holiday, like tomorrow. So, there are no restrictions; you could buy something today and sell it tomorrow," Kamath added.

While the platform will be open, the co-founder does not encourage large volumes of trading and advises traders to cautiously proceed with their moves.

The movements ahead and on the Budget day have been extreme at times with fluctuations, with markets 4.17% down in 2020 and 3.87% up in 2017. In the past five Budgets, Nifty 50 has declined during the week running up to the announcements of Budget.