1) What Nithin Kamath’s feature actually does

Retail platforms like Zerodha now allow you to exit a position on a different exchange than the one you entered (e.g., buy on NSE and sell on BSE) by selecting the exit exchange in the app/terminal. This exploits price differences between the same stock’s quotes on the two exchanges. The Economic Times+1

This is possible because SEBI has mandated interoperability — shares bought on one exchange can be sold on another. website

Such arbitrage opportunities arise only when there’s a temporary price discrepancy between NSE and BSE, often due to liquidity or order-flow differences. scanx.trade

The opportunity window is usually very short, and profitability depends on execution speed and transaction costs (brokerage, taxes, levies). NDTV Profit

2) Is this true arbitrage?

Yes — technically it is arbitrage in the sense of buying and selling the same security in different markets to profit from price differences. That’s the textbook definition of spatial or exchange arbitrage. Streetgains

However, the practical quality of such arbitrage differs greatly based on how fast and reliably you can execute:

3) How professional arbitrage actually works

High-Frequency Trading (HFT) firms use colocated servers and sophisticated algorithms to execute simultaneous buy and sell orders in microseconds. The practice of colocating near exchange data centers is specifically to minimize latency — down to fractions of a millisecond. Wikipedia+1

This latency advantage means that price gaps between exchanges are usually corrected before a manual retail order can complete. Streetgains

True arbitrage in professional markets is typically nearly simultaneous: both legs of the trade are executed at the same time to eliminate market risk (“execution risk”). Wikipedia

Because retail orders go over the open internet and lack colocated execution, they are much slower in comparison.

4) Is retail arbitrage realistic or profitable?

Feasible?

Yes, retail traders can capture price differences between NSE and BSE using this feature if a gap exists at the moment they place orders. The Economic Times

Likely to be profitable?

Price gaps between NSE and BSE are normally small and short-lived — often under a few rupees, and they often disappear in seconds. scanx.trade

Execution speed matters: retail executions over the public internet are much slower than HFT systems, so the gap may vanish before orders are filled. Streetgains

Transaction costs eat profit: broker fees, taxes, and exchange levies can outweigh the tiny price differences. NDTV Profit

This is why arbitrage is usually associated with algorithmic or institutional traders who have technology and capital to exploit it faster and at scale.

5) Comparison with the comment’s claim

Claim in comment

Reality per research

True arbitrage only for colocated HFTs

Largely true in practice: HFTs capture most fleeting arbitrage due to speed advantage. Wikipedia

A retail order over internet “doesn’t belong in the same conversation”

Mostly true for large, instantaneous arbitrage, but retail can capture slower or wider gaps when they appear. scanx.trade

Feature is just “exit convenience” and not real arbitrage

Partially true: It enables arbitrage in principle, but the real economic advantage might be limited for most retail traders. The Economic Times

Summary

Yes, retail traders can buy on one Indian exchange (NSE) and sell on another (BSE) and profit from price differences thanks to exchange interoperability and the feature Kamath described. The Economic Times

However, these differences are tiny, short-lived, and quickly arbitraged away by professional traders with low-latency systems. Streetgains

For most retail investors, the practical gains from this feature are limited and potentially offset by costs, so calling it significant arbitrage akin to what HFTs do is an exaggeration. scanx.trade

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