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Nithin Kamath says genuine hedging in options market is now harder due to heavy speculation

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Nithin Kamath says genuine hedging in options market is now harder due to heavy speculation
Zerodha co-founder Nithin Kamath has flagged a structural shift in India’s options market, warning that the explosion in weekly options trading has made it harder for investors to hedge market risks, particularly during periods of geopolitical volatility.

In a post on X, Kamath said serious hedgers typically rely on options contracts with maturities of 30 days or longer, but the market has increasingly shifted toward ultra-short-term contracts following the rise of weekly expiries.

According to data shared by Kamath, the open interest (OI) structure of Nifty index options has changed sharply over the past decade. In 2015, contracts expiring within 0-7 days accounted for about 18.8% of total index options open interest. Today, that share has surged to around 60.4%, reflecting a significant concentration of trading in near-term contracts.

At the same time, the share of 16-30 day contracts has dropped sharply from around 30% in 2015 to just about 12% now, indicating that longer-dated options, typically used for portfolio hedging, have lost liquidity.

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Kamath said the shift has been even more dramatic when measured in terms of trading volumes. Total index options contracts traded per quarter have surged from about 564 million in 2015 to a peak of 34.9 billion in the third quarter of 2024, representing a roughly 62-fold increase.


However, he noted that the growth has been driven almost entirely by contracts with maturities of less than seven days, suggesting that the surge in activity reflects speculative trading rather than traditional risk management.
“The market has structurally shifted from hedging to speculation,” Kamath said in his post.While the surge in liquidity is positive for market participation, he warned that it has created an imbalance in the options market structure. Liquidity is now heavily concentrated in very short-dated contracts, while longer-tenor options, which institutional investors and portfolio managers use to hedge risks, have become relatively thin.

This imbalance becomes particularly visible during periods of elevated volatility, such as the current geopolitical tensions involving Iran, Israel and the United States.

Kamath said that during such episodes, investors looking to buy protection through longer-dated options often find it difficult to execute meaningful hedges because liquidity in those contracts has dried up.

“When volatility spikes, buying meaningful insurance is difficult precisely when people need it most,” he said.

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He argued that a healthy derivatives market should offer liquidity across multiple time horizons, including 30-day, 60-day and 90-day contracts, rather than concentrating almost entirely on near-week expiries.

To address the imbalance, Kamath suggested that regulators and exchanges could consider pricing incentives to encourage longer-tenor options trading. Measures such as lower securities transaction tax (STT), reduced exchange charges and lower brokerage costs for options positions held beyond 30 days could help attract more activity to longer-dated contracts.

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NYT Connections Answers and Hints for April 4 2026 Puzzle #1028 Revealed

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Nancy Guthrie

The New York Times Connections puzzle for Saturday, April 4, 2026 — No. 1,028 — challenged players with 16 words that invited creative associations ranging from idioms to geography and summer activities.

The New York Times Connections
The New York Times Connections

The daily word-grouping game, launched in 2023, requires solvers to sort 16 words into four groups of four based on shared themes. Categories range in difficulty from yellow (easiest) to purple (hardest). Testers rated today’s puzzle a relatively gentle 2 out of 5 in difficulty, according to the official companion article.

The 16 words presented were: Dogs, Let, Lie, Sleeping, Cover, Mask, Screen, Shield, Bluff, Cape, Point, Spit, Band, Base, Boot, Summer.

Here are the complete solutions, with spoiler warnings for those still solving.

Yellow (Easiest): “Let Sleeping Dogs Lie” Dogs, Let, Lie, Sleeping

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This category draws directly from the well-known idiom advising people to avoid stirring up old troubles or controversies. The phrase suggests leaving a situation undisturbed, much like not waking a resting dog. Solvers who spotted the partial idiom early often breezed through this group.

Green: Obscure Cover, Mask, Screen, Shield

These words all relate to hiding, protecting or placing something in front of another object or concept. A “cover” story conceals truth, a “mask” hides identity, a “screen” can block view or information, and a “shield” protects from harm or scrutiny. The category rewards recognition of verbs or nouns used metaphorically for concealment.

Blue: Coastal Landforms Bluff, Cape, Point, Spit

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Geography enthusiasts likely excelled here. These terms describe specific features along coastlines or bodies of water. A “bluff” is a steep cliff or bank, a “cape” is a headland jutting into the sea, a “point” is a narrow extension of land, and a “spit” is a narrow sandbar formed by water currents. The group highlights precise terminology from physical geography.

Purple (Hardest): _____ Camp Band, Base, Boot, Summer

This trickiest category involves words that commonly precede or pair with “camp” to form compound terms or familiar phrases. “Band camp” refers to music-focused youth programs, “base camp” is a mountaineering or expedition staging area, “boot camp” denotes rigorous military-style training, and “summer camp” evokes classic childhood experiences with cabins and activities. The purple difficulty stems from the need to think beyond literal meanings to common collocations.

Solving Strategies and Tips

Many players approached the grid by first scanning for obvious idioms or strong thematic clusters. Spotting “Sleeping,” “Dogs,” “Let” and “Lie” often unlocked the yellow category quickly, providing momentum.

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For the green group, considering synonyms for “hide” or “protect” helped connect the dots. The blue coastal terms stood out to those with travel or nature knowledge, though “spit” as a landform occasionally tripped up solvers unfamiliar with the term.

The purple category proved most elusive for some, requiring a lateral leap to “camp” as a connector. Hints from sites like TheGamer suggested thinking about activities or places associated with tents and structured programs, particularly those popular with youngsters.

Experienced solvers recommend starting with potential idioms or multi-meaning words. Grouping by part of speech or looking for words that fit common prefixes/suffixes can also accelerate progress. On hard mode or when stuck, eliminating one strong category often reveals connections in the remaining words.

Community Reactions and Performance

Early feedback on social platforms and the NYT companion comments described the puzzle as fair and enjoyable, with many achieving perfect or near-perfect solves. The low difficulty rating contributed to higher success rates compared to more punishing recent editions.

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Some players noted the satisfying “aha” moment when connecting the coastal landforms or realizing the “camp” pairings. Others admitted overthinking the purple category, initially linking words to music or military themes without landing on the shared “camp” element.

The puzzle’s timing on a spring Saturday — coinciding with Easter weekend observances for many — added a light, seasonal feel, though no direct holiday references appeared in the grid.

Connections’ Growing Popularity

Since its debut, Connections has become a staple alongside Wordle and the Mini Crossword in The New York Times Games portfolio. Millions play daily, sharing color-coded grids on social media and competing for streaks. The game’s appeal lies in its blend of vocabulary, lateral thinking and cultural knowledge without requiring specialized expertise.

For April 4, 2026, the mix of an idiom, verbs of concealment, geographic features and compound phrases offered balanced challenge. Players who missed categories could still complete the puzzle with lives remaining, as the NYT system allows four mistakes before ending the attempt.

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Tips for Future Puzzles

  • Look for words with multiple common usages.
  • Consider idioms, song titles, brand names or pop culture references.
  • Group by theme rather than obvious synonyms.
  • Use the color progression: solve easier groups first to reduce options.
  • If stuck, pause and return with fresh eyes — Connections rewards patience.

The New York Times provides an official companion article with incremental hints, revealing one word per category for those needing a nudge without full spoilers. Community sites and bots offer additional analysis of puzzle difficulty based on aggregate solve data.

Looking ahead, Sunday’s puzzle (No. 1,029) will present a fresh grid for Easter Sunday players seeking a mental break between family activities.

Whether you nailed all four categories in order or needed several attempts, today’s Connections reinforced why the game resonates: it turns ordinary words into surprising connections and delivers that rewarding click when groups align.

For those who enjoy tracking performance, the NYT Games app and website save daily results and statistics. Sharing solves with friends or family can turn the solitary puzzle into a group activity, especially during holiday weekends.

The April 4 edition stands as an accessible entry in the Connections catalog, welcoming both newcomers and veterans with clever but not cruel wordplay.

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State pension age starts rising to 67 – here's how much you get and when

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State pension age starts rising to 67 - here's how much you get and when

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OneWater Marine Inc. (ONEW) Q1 2026 Earnings Call Transcript

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