Be careful! Don’t do this while investing2 min read

April 5, 2022
Don’t do this while investing


Be careful! Don’t do this while investing2 min read

Trading and investing is not easy, and making a few mistakes is natural. However, there are certain principles you can follow to invest responsibly and avoid making losses.

There are also times when we want to try a new strategy to create wealth quickly. There is nothing wrong in wanting to create wealth quickly, but there are instances of traders and investors putting in their money without fully understanding the asset and product. 

Both the NSE and BSE on March 25, 2022 released circulars cautioning investors about unsolicited trading tips, unauthorised entities and trading without understanding the product. 

  1. Don’t share sensitive information with unauthorised entities: If an entity is not registered with SEBI, then they have no right to ask for information such as trading credentials (login id & passwords), trading strategies and position details.

Scamsters might often ask people to buy or sell a particular stock, or follow a trading strategy to get guaranteed returns, which are false promises.  

In its circular to brokerages, the NSE said “It has been observed that clients trading in derivatives were lured to share trading credentials – (login id & passwords) with the individuals/persons who had promised assured returns and traded on behalf of these clients.”

  1. Stay away from what you don’t understand: Trying new things is good, but being responsible is important too. 

Avoid trading in leveraged products /derivatives without understanding how it works. If you’re writing/selling options, or trading in options strategies, make sure you have basic knowledge and understanding of the subject. 

  1. Avoid acting on recommendations from unauthorised investment advisors: While this is an obvious fact, it cannot be stressed enough. If you’re taking advice from a person/organisation (even if it is through social media accounts), do check their credentials. 

Ignore unsolicited stock tips sent through Whatsapp, Telegram, YouTube, Facebook, SMS, calls, etc. Scamsters send such messages with the intent of manipulating the market. 

Such messages and calls might tell people to buy and sell a particular stock for guaranteed returns. We are certain that these messages are not in your best interest, and making such false promises is illegal.  

In a previous blog, we have written about how you can identify such messages sent by unauthorised entities. 

There’s nothing wrong with trying to improve your investing game to create wealth. But be equally careful while trying to achieve your financial goals. 

Disclaimer: Investments in securities market are subject to market risks, read all the related documents carefully before investing. This content is purely for educational, information and investor awareness purposes only. Please refer for further information.