In a recent LinkedIn post, Nithin Kamath, the founder and CEO of Zerodha, highlights a lesser-known feature available to stock traders on Indian exchanges that can be leveraged for arbitrage opportunities. Kamath’s post aims to educate investors about the flexibility of trading across the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE) within the same trading day.
The core of Kamath’s insight revolves around the ability to execute intraday trades by buying on one exchange and selling on another, a strategy designed to capture potential price discrepancies. He points out the practical application of this feature for traders looking to capitalize on market inefficiencies.
“You can buy a stock for intraday on NSE and sell it on BSE (or vice versa) to capture arbitrage opportunities if you spot any.”
Understanding Cross-Exchange Arbitrage
Nithin Kamath explains that this capability allows traders to exploit price differences that may arise between the NSE and BSE for the same stock during a single trading session. Such price differentials, often termed arbitrage opportunities, can occur due to various market dynamics, including differences in order book depth, trading volumes, or even slight delays in price dissemination between the two exchanges.
According to Nithin Kamath, the process is designed to be straightforward for the end-user. He notes the accessibility of this feature through the trading platform, stating:
“Just select the exit exchange from your positions page.”
This suggests that the trading interface is built to facilitate such cross-exchange transactions with minimal complexity, allowing traders to quickly act on identified arbitrage chances.
Immediate Margin Release
A significant advantage highlighted by Nithin Kamath is the immediate release of margins once the position is squared off across the exchanges. This is a crucial aspect for intraday traders, as it frees up capital instantaneously, enabling them to potentially take on new positions or manage their risk more effectively throughout the trading day.
Kamath emphasizes the efficiency of this margin management system, stating:
“Margins get released immediately.”
This immediate release can be a considerable benefit, especially in volatile market conditions where quick capital deployment is essential.
Applicability Beyond Intraday Trading
Furthermore, Nithin Kamath clarifies that this cross-exchange trading facility is not limited solely to intraday strategies. The same mechanism can be utilized even when a trader intends to hold a stock beyond the trading day, offering flexibility in managing their portfolio and potentially optimizing their exit strategy.
In his concluding remarks on the post, Nithin Kamath adds:
“And it can be done regardless of whether you are trading for intraday or holding a stock.”
This broad applicability underscores the utility of the feature, extending its benefits to a wider range of trading and investment approaches beyond pure day trading. Kamath’s post serves as a valuable reminder of the sophisticated tools available to traders on modern exchanges, encouraging a deeper exploration of platform functionalities to enhance trading strategies.
📝 About This Content
This article is based on insights shared by Nithin Kamath on LinkedIn.
📅 Originally posted on December 30, 2025 | View original post on LinkedIn →