Nithin Kamath has been stress-eating. “I’ve put on five kilos,” admits Kamath, the CEO and co-founder of Zerodha, India’s largest stockbroker in terms of the sheer number of broking accounts.

It’s not hard to see why he’s so wound up. While the Covid-19 pandemic has brought the world to an unprecedented standstill, it has wreaked havoc on the trading space. On 20 April, for instance, the contract price of West Texas Intermediate (WTI) oil futures for May fell to -$37 a barrel.

“It was probably the craziest day of my 25 years of being in the capital markets. A contract trading at a negative value is unheard of,” Kamath exclaims. In fact, on Indian commodity exchanges, systems do not even allow for a commodity’s value to drop below zero.

When the market opened the next day, the Multi Commodity Exchange Clearing Corporation (MCXCCL), a wholly-owned arm of the Multi Commodity Exchange (MCX) of India, asked stockbrokers to settle the oil futures at Rs 1 to start with. Later on, it settled the contract price at -Rs 2,884 (-$38) per barrel.

Traders who went short on oil—betting it would fall—made a killing. Zerodha, on the other hand, took a hit of Rs 10 crore ($1.3 million). This is because the value of oil swung so wildly that the margins margins Margins Margins allow traders to deposit a small amount of money and take exposure to a large value transaction, thereby leveraging on the trade traders had fronted for these oil contracts were woefully inadequate to cover their losses, which the platform had to cough up instead. Brokers must now recover this from traders. If traders can’t make good on their debts, brokers can only block them from their platforms.

All told, Indian brokers lost Rs 330 crore ($43.5 million) due to the 20 April crash, according to Kamath.

As Covid-19 continues to disrupt the very notion of normalcy, these sort of incidents are becoming more frequent. On 9 March, a similar dip in the value of crude oil contracts saw brokers lose around Rs 100 crore.

And it isn’t just commodities either. India’s publicly listed companies have lost over $400 billion in market capitalisation since February. The Nifty, the benchmark stock index of the National Stock Exchange, is down 22.6% since 24 February and has fallen steadily since early March. The market saw circuit breakers circuit breakers Circuit breakers Circuit breakers are regulatory mechanisms put in place in stock markets to temporarily halt trading and curb panic-selling triggered twice in March alone. The last time this happened was during the global financial meltdown in 2008.

“All companies were impacted and saw their revenues shifting.


Arundhati Ramanathan

Arundhati is Bengaluru-based. She is interested in how people use money in the digital age and how new economies will take shape based on that interaction. She has spent over 10 years reporting and writing on various subjects. Previous stints were at Mint, Outlook Business and Reuters.

View Full Profile

Available exclusively to subscribers of The Ken India

This story is a part of The Ken India edition. Subscribe. Questions?


Annual Subscription

12-month access to 200+ stories, archive of 800+ stories from our India edition. Plus our premium newsletters, Beyond The First Order and The Nutgraf worth Rs. 99/month or $2/month each for free.

Rs. 2,750


Quarterly Subscription

3-month access to 60+ new stories with 3-months worth of archives from our India edition. Plus our premium newsletters, Beyond The First Order and The Nutgraf worth Rs. 99/month or $2/month each for free.

Rs. 1,750


Single Story

Instant access to this story for a year along with comment privileges.

Rs. 500


Annual Subscription

12-month access to 150+ stories from Southeast Asia.

$ 120


Quarterly Subscription

3-month access to 35+ stories from Southeast Asia.

$ 50


Single Story

Instant access to this story for a year along with comment privileges.

$ 20



What is The Ken?

The Ken is a subscription-only business journalism website and app that provides coverage across two editions - India and Southeast Asia.

What kind of stories do you write?

We publish sharp, original and reported stories on technology, business and healthcare. Our stories are forward-looking, analytical and directional — supported by data, visualisations and infographics.

We use language and narrative that is accessible to even lay readers. And we optimise for quality over quantity, every single time.

What do I get if I subscribe?

For subscribers of the India edition, we publish a new story every weekday, a premium daily newsletter, Beyond The First Order and a weekly newsletter - The Nutgraf.

For subscribers of the Southeast Asia edition, we publish a new story three days a week and a weekly newsletter, Strait Up.

The annual subscription will get you complete, exclusive access to our archive of previously published stories for your edition, along with access to our subscriber-only mobile apps, our premium comment sections, our newsletter archives and several other gifts and benefits.

Do I need to pay separately for your premium newsletters?

Nope. Paid, premium subscribers of The Ken get our newsletters delivered for free.

Does a subscription to the India edition grant me access to Southeast Asia stories? Or vice-versa?

Afraid not. Each edition is separate with its own subscription plan. The India edition publishes stories focused on India. The Southeast Asia edition is focused on Southeast Asia. We may occasionally cross-publish stories from one edition to the other.

Do you offer an all-access joint subscription for both editions?

Not yet. If you’d like to access both editions, you’ll have to purchase two subscriptions separately - one for India and the other for Southeast Asia.

Do you offer any discounts?

No. We have a zero discounts policy.

Is there a free trial I can opt for?

We don’t offer any trials, but you can sign up for a free account which will give you access to the weekly free story, our archive of free stories and summaries of the paid stories. You can stay on the free account as long as you’d like.

Do you offer refunds?

We allow you to sample our journalism for free before signing up, and after you do, we stand by its quality. But we do not offer refunds.

I am facing some trouble purchasing a subscription. What can I do?

Please write to us at [email protected] detailing the error or queries.