Stock market scams everyone should be aware of

Hindi: इस पोस्ट को हिंदी में पढ़ने के लिए यहाँ क्लिक करें।

The lure of easy money is what attracts people to trading and investing, including yours truly. But like someone once said, “Stock markets are the toughest place in the world to make easy money in the long run”. This realisation typically occurs when one is in a drawdown (the account is in loss). However, the sunk cost fallacy forces us to act irrationally in hopes of recovering losses. That weak moment is when even the sharpest amongst us fall prey to frauds. Below are the two most common ones that you need to be aware of. 

The fraud adviser who creates an intentional loss 

When on a financial loss, most of us instinctively tend to believe anyone who claims that they can help us get out of it. Of course, there are many good advisers and trainers who possibly can, but there are also many fraudsters claiming to be market experts prowling on social media and waiting to prey if you show weakness. 

While it is okay to pay a fee to a SEBI registered Investment adviser to help you out or to get trained by an expert on how to trade, what has to be avoided is sharing your login credentials to your account with any third party. While there might be many well-meaning advisers who might offer to trade on your behalf which might seem convenient, but it also exposes you to huge risk of a fraudster who can create a loss in your account using non-genuine trades and move your money to another trading account, making it very tough for you to even figure that you have been scammed. 

How?

Over 30,000 options contracts are listed on the exchange, but only a fraction of them actively trade, while the rest are illiquid. These options contracts where there is no other trading are used by scammers to place illegitimate trades (buy high and sell low with the same account and in quick succession) which creates a loss in your account and profit in the other trading account. You would assume this is a genuine market loss, but it clearly isn’t. 

Apart from the loss, you are now also exposed to regulatory action. Any such trading activity in your account would be looked upon by the income tax department as money laundering (creating losses to avoid taxes, or convert white to black money or vice versa). SEBI considers such trades circular trading. Apart from the monetary penalty that such trades entail, you could potentially be banned for life from the markets by SEBI.

What can you do? 

  • Never share your login credentials with anyone enabling others to trade on your behalf.
  • If you don’t understand options, don’t trade them even if someone is asking you to. Options are risky and you need to understand them well before you trade them. 
  • If you know options, know that when trading illiquid options, you can determine an approximate fair value of an option by using IV (Implied Volatility) of a liquid strike of the same underlying and using it in the Black and Scholes (B&S) calculator. You can see the IV on option chain on Kite.
  • If you had given access to someone who has created such an artificial loss, you can lodge a police complaint against the fraudster, let our compliance team know about it, and we will help you with the case. 

What are we doing? 

  • Since we have seen a rise in such scams recently, we now have an illiquid option check on the order screen to help you out even if you are being deceived by someone. Orders will get rejected on options contracts which we believe can be used for executing non-genuine trades to create a loss in your account. 
  • As a secondary check, we will also soon start running a background risk process to alert exchanges anytime orders are placed at a price which is far away from the theoretical price of the illiquid option (which will be calculated using IV of the liquid strikes). If trades are found to be non-genuine, we will request exchanges for trade cancellation and regulatory action.

Note: While we will run these checks and add new ones with time, they still aren’t foolproof and it is critical that you don’t share your login credentials with anyone, or place orders that you don’t understand based on someone’s instructions or advice.

The pump & dump scheme 

Pump & dump schemes have been made famous in many movies based on stock markets, and hence a much easier fraud to detect. But still, greed causes many to fall prey for it. Out of the 4900+ companies listed on the stock exchanges, over 1700 are what are called “penny stocks”. Penny stocks are small companies with market caps of less than Rs 100 crores. While there are many genuine small companies, there are also many that aren’t.

In a pump and dump scheme, the operators (people who hold the majority of the shares of the company) of these penny stocks move the price of the stocks up and down at will. To move the price up, the operators start placing small amounts of buy orders at higher prices incrementally, and since they own all the stock, the price starts moving up. Once it has moved up enough to make retail investors greedy – a buzz is created through SMS, social media, and online forums to push the price up even further. This is when typically most people get sucked into the stock and also when the operator starts selling the stocks. As soon as the selling is done at these high prices, the buzz stops and the stock falls back to the price where the upward journey started without giving anyone an opportunity to exit. Here are some recent examples

Again, apart from the loss, there is another issue to consider. The government introduced Long Term Capital Gains (LTCG) tax of 10% a couple of years ago to control money laundering fraud that runs through such penny stocks, a fraud estimated to be the size of tens of thousands of crores. The operator who moves the price of the stock from almost 0 to much higher before selling, would also do it by holding the stock for more than 1 year to benefit from lower long term capital gain (LTCG) tax (10% now, but was only 0% earlier) on the profits. So the operator isn’t just potentially ruining many gullible investor’s financial health, but is also potentially converting someone’s black money into tax-free white money in the process. With LTCG now at 10%, this now becomes the cost for an operator to convert black into white. Govt is hoping that it could act as a deterrent. Income tax department keeps a close watch on everyone transacting in such suspicious companies. What this means is that, even if you made some money trading such a stock, you could get an Income tax scrutiny notice which potentially can lead to a penalty of more than the profits earned. 

What can you do? 

  • Don’t trust stock tips that promise quick returns. Do your research before investing. At least, confirm if the business and promoters are legitimate.
  • Don’t trust SMS asking to invest in penny stocks. Many scammers send SMS using shortcodes that make it seem like it is from a reputed brokerage firm. Variations of the name “Zerodha” have been illegally used by scammers recently.
  • If you receive an SMS asking you to invest in a penny stock, make sure to report it to TRAI and help save others from falling to the fraud. Check this on how to report to TRAI. Also, post it here, so we can alert all other users.
  • Stay away from penny stocks, and if you did decide to let greed take over, think of it as a lottery ticket which potentially can be worthless. So, invest only what you can afford to lose. 

What are we doing? 

We now have a penny stock nudge on our buy order window (currently on the web and soon on mobile). The idea is to alert you if you didn’t know what you are investing is in a penny stock, and we will also have an additional warning for stocks which we think are currently being manipulated through SMS tips and social media buzz. Of course, you would be free to proceed, but hopefully, you won’t, and even if you did you will reduce the trading size to as little as possible to reduce your risk. 

Penny stock nudge on the order window

A confirmation to ensure you understand the risks

I hope you will share the above piece of information with as many people as possible and help them from falling prey to such frauds. If you are trading at Zerodha, we will do our best to ensure that you aren’t duped through nudges mentioned above.

 

Happy Trading,  

Nithin Kamath

CEO @ Zerodha and partnering startups through Rainmatter to help grow and improve the capital market ecosystem in India. Love playing poker, basketball, and guitar. @Nithin0dha on Twitter.

226 comments

  1. Bikash Kalita says:

    Wow! Such the valuable information and zerodha tried for customers education,

    • Baka says:

      Excellent , if it would have been there few months ago . Thanks a lot

      • subodh says:

        Hi Nithin – The illiquid option check on the order screen button is not the correct solution as it is preventing genuine investors from trading far month options. for EX: today i was trying to Sell options of yes Bank April month(YES BANK April 45CE @1.90 but it was not allowing me to place the order. What should we do? not trade far month options. I am losing an opportunity here. i did not sell near month option because the premium was less.

    • Shridhar says:

      I’m Really appreciate Zerodha for there kind information’s giving to us. Even today I’ll be having so many fraud messages in my box but i never read or forward those msg to friends also. I just go on deleting them. TQ Zerodha Team

      • Mallinath says:

        Sir
        I ignored many SMS and said that they are experts.
        Even gave call,then rejected at once.
        Thank you Kamat sir educating and making awareness to retail and small investors like me.
        With warm regards
        Mallinath Shrigani

    • Prabhakar says:

      Hi Sir
      I saw recently in YouTube channel many traders mentioned that zerodha itself cheating customers by triggering stop losses and not triggering stop loss orders and many other ways.
      Is it true

    • Bheemudu Sahu says:

      Very happy to see this information but in the same case I was lost nearly 3 lacs by giving my user ID and password.Even i don’t know now what can I do not understanding is it really lose or something happened fraud.

      • Manish soni says:

        Hi, Appreciate Zerodha and team to publish such awareness. However pls let us know where to report the case of fraud already happened. I lost 8 lacs in option trading because of a indore based company. I can share the further details if required.

        • Vishnu says:

          If that co. is Sebi registered then complain it under SCORE.in… it’s the Sebi complaint department…collect some proof too of fraudery..they will help you lot

      • Vishnu says:

        Please never share your I’d &pswd ….totally it’s fraud…as soon as possible change your password…in the beginning of my trading journey I also got trap in these situation…

      • Sankar P T says:

        I also losed one of the company called agrich traders.com and pmsfinancial.net..
        the taken my principal amount into zero balance. Am fighting with them now.
        Please guide me any leagal action can take fro them?

    • Akbar says:

      Very important and valuable information for many traders

    • Vikas says:

      No other broker team has taken that effort to educate the investors about the scams. This information may be one their site or somewhere but no one bothers that investor to read it.
      Thanks Zeridha, appreciate it.

    • Maansi says:

      Patel Wealth advisory is one of them this is fraud company I have very bad experience

    • Raj Shekar says:

      Thanks for the update and also you should be aware tht traders also lost money which were in profits becoz of ur technical issues … recently I lost abt 30k which were in profit earlier and when placed order to book profits it only gave error order not sent or etc when contacted phones never picked up … for info I can send u screen shots taken on the order window and also phone calls made form mrng 10 to 3:15 continuously .. Do u have any comments on this !!!

    • R.Muthurajan says:

      My account to withdraw in 07 FEB 2020 rs 2500 zrotha is processed then not come my account please help what I do best sir

    • Mahender says:

      Very well said facts of the markets all over, especially in India filled with SCUMgress cultured.

    • Purniah Boddapati says:

      I completely agree that this is a valuable information for us investors.

    • ALOK says:

      I am really thankful to the Zerodha Management (specially to Mr. Kamath) for making us aware of various frauds happening in the market. I also request Zerodha management to start advising on stocks on daily basis as others like Icici, angel, Motilal etc. do. It could be a short term or long term suggestions on Fundamental or Technical categories. Small Investors like me will highly be benefited. It is the prerogative of the investor to accept or reject the suggestions offered by ZERODHA RESEARCH TEAM

    • Raja says:

      About 10 days back, shared my credentials with Gujarat based team. I don’t know if they are SEBI registered. Today happened to see your SMS alert on scamsters & fraudsters.
      I paid an Annual sum to those people to trade in my account. Still went ahead & changed my pwd on seeing Zerodha sms.
      Pls revert if it’s ok now or am I still at risk.

    • Joy says:

      Thanks Zerodha. Wished it was published little earlier. Recently cheated by a firm called Proworth. Operated my account and sank my investment. We must be careful about such firms.

    • Ankita sengupta says:

      I m a new comer in the stock market and a CA final student .. I would like to thank you for letting this kind of warning cum valuable information in your app which helped me to be careful before investing..

  2. Ramesh Pandey says:

    This is brilliant, I am amazed on how Zerodha keeps coming up with new ways to solve problems and improve user experience.

  3. Rm3046 says:

    Appretiate Nithin, valuable info

  4. 3days_Non Stop Vina says:

    thanks bro.. good initiatives.

  5. Teja says:

    Great info. All investors should be careful to make sure their investments are safe!

  6. Prudhvi says:

    This is nice. Small and new investors, should read this and prevent themselves from falling into trap.

  7. Amrit Singh says:

    Amazing! This will be really helpful. I have personally received a few spam messages and knew to avoid them, this will make sure that people a secure trading on this platform.

  8. Mohammed salim says:

    Now, I can see the no ticket token is generated from your side for any enquiry or query which was better earlier, You started refferal programme, i refereed my friend name, no action taken on that till now, your backside support team performance is now decreasing from the past perfromance.

  9. Suvajit says:

    I just love what you are doing for everyone. I kind of feel that you truly value that “Sharing is Caring”. Thank you!!

  10. hemant goyal says:

    I request start sms service also for any trade done in account so that person will get sms alert for buy and sale like we get in Samco and others.

  11. HARIRAM says:

    Amazing… Very Useful News…. Last year I’ll resign my job. Now I am a full time trader. My life is smoothly running. Because the Only Reason is ZERODHA.. Very very thanks to ZERODHA and Nithin Kamath Sir…. Maybe zerodha is world’s No:1 Broker in coming years.. Congratulations………..

  12. srinivasan D says:

    thanks for the awareness ….zerodha

  13. P K Mohan says:

    Excellent awareness creating facility. Helpful for retail traders. Thanks a lot to Zerodha team.

  14. Peter says:

    Timely Warning Nithin . Mucho Gracias!

  15. S Nagaraj says:

    Wow. Nice one. Thank you very much for your invaluable service to your clients and the nation. God bless you sir.

  16. Gopu says:

    This is why I love Zerodha. Low carb high protein stuff only.

  17. Amit says:

    Hi Nithin and Team,
    Really Gr8 work.
    Please allow Stock Options trading at market Price.
    For this You and team may consider:
    1. Regular traders and
    2. Liquidity in Stock options (like Reliance, MGL, Indusindbk etc)
    This will b gr8 help for traders
    Thanks
    Amit

  18. Abhishek says:

    Thank you

  19. Henty Joseph says:

    nice one thank you

  20. Vasanthrao says:

    Zerodha trading platform fraud and chitting costumes

  21. mallikarjun says:

    Good job zerodha…keep us updating(‘.’)
    tq

  22. Gautam Khanna says:

    Good info bro thank you

  23. Gokul says:

    It is features like these that show the world that Zerodha does seriously care for its customers. How I wish every business had such customer-centricity. Keep up the good work!

  24. Mangesh Y Shirke says:

    NICE ZERODHA TERMINAL

  25. Ranjan says:

    What is use of increase the ” Long Term Capital Gains” to 10% this will make the investor trouble right i dont think this is good.

    I am plan to buy good stocks and hold more the 1 Year will i need to pay tax on that. For one Year the stock will appreciated 10% on that i have to 10% than it will zero sum game

    Most of the comment look that fake comment from zerodha also

    • Matti says:

      You only pay 10% LTCG tax on the gains. So, if you bought a stock at 100 and it goes up to 110, you pay 10% of 10 (110-110) i.e., Rs.1 as LTCG tax. LTCG is only applicable for stocks held for more than 365 days.

  26. KS says:

    Valuable insight!!!
    Thanks for sharing!

  27. RAM RATAN SINGHAL says:

    Well, scams are regural phenomena and all broadcast provide safty majors. Still if someone knowingly fall into that, then they themselves are responsible for the same.

    RRS

  28. ABD says:

    Excellent initiative by Zerodha👌

  29. krushna palve says:

    I had loss of 10 k
    Due to advisory company located at indore
    Can i file complaint against it

  30. Anil Nagaraja says:

    I have lost more than 1 lac in the pump and dump scheme..had given my credentials to someone else…it’s value has eroded by 20k in 1 week..I have no idea what to do..

    • Manu Manjunath K R says:

      Consultant any one…or zerodha and exit it before it goes down…slowly it will go down to zero and you lose everything…better to lose 20k and save 80k then lose everything

    • Saurabh Shrivastava says:

      First change the password..Then get financial education otherwise you will keep loosing hard earned money

    • Ganesh B says:

      Hi
      Mr. Anil, even I also lost a lot of money through those kind of people. If you wish to or anyone can contact me for help. M: 8106241985.

      Thanks

      Ganesh Banda
      Hyderabad.

  31. panneer selvam says:

    Great!!!

  32. Sudhakar reddy says:

    Thanks for valuable information. Also good initiations by Zerodha end to counter such frauds.

  33. ME says:

    Very important info, thank you for sharing.

  34. Ravi says:

    This is what is called a real Service to customers borne out of real concern and not just “What’s in it for me?” corporate attitude.

    Hats off to Zerodha. Keep up the good work.

  35. Numan Nazir says:

    This is what I love about zerodha, they genuinely care about their customers. Not only do you guys build new features for customers but make side their trading experience is as simple and convenient and possible. This is what inspires trust. Great job!

  36. Akshay Jain S says:

    Nice and innovative way to get awareness thanks

  37. Chandan Baidya says:

    In the name of foreign investment FIIs are stealing our money and investing in their company if you see the chart pattern on long term basis you will see the truth

  38. Vasista says:

    Hey Nitin! I very much appreciate your intent. But arent you indirectly manipulating people who say actually identified some opportunities in some of these illiquid stocks/options by the “illiquid alert”. Again, please dont get me wrong – im just a litle curious. Also, in this day and age if someone trusts someone by giving them their id password then god save you. Most probably you will be cheated.

  39. ED says:

    Hi Sir,

    What about if we receive advisory from genuine ZMP.

  40. VIJAYKUMAR G SANE says:

    thanks giving good hints

  41. mahadev phad says:

    Excellent Job Sir in 1st time in India

  42. Mani Kandan says:

    Thanks zerodha

  43. Hardik says:

    Thanks for the post, and appreciate you going extra mile.

  44. Umesh shetty says:

    Thank you

  45. Sushovan Dube says:

    Astonished!

  46. srikanthg says:

    can we list out all the stocks with N nudge symbol..like below:
    1.MERCATOR
    2.GBGLOBAL
    3.Mandhana

  47. Dhawal M Shah says:

    This feature is just Awesome.
    You guys are way ahead from all the other Brokerages combined together.
    Thank You, as my own sister has invested in such penny stocks reading SMS. But now the Nudge from you will act as a Helmet,( surely will not give life but protect).
    Thank You Sir once again for saving small innocent investors who out of greed invest and loss all.

  48. Siva says:

    Thank you for alerting the investors about risk and developing the risk frame work over your platform.

  49. Abhilash R says:

    Zerodha you can come up with a list of genuine tip providing companies approved by sebi and that will be so helpful for traders and investors to choose. These fraudulent companies get numbers from some source and used to call traders with luring wrong details and cheating their money. You can try to come up with a list to help many new traders.

  50. JOSEPH says:

    Hi Nithin we truly adore you for your intiatives. Thanks and happy to be part of zerodha

  51. Vivek Vijay Shinde says:

    Hi,

    Thank you such an valuable information.

    Regards,
    VVS

  52. S Venumadhav says:

    Thank you for giving useful information

  53. Kevin says:

    Nice one. Keep up the good job. So transparent and creating awareness.

  54. Digvijay says:

    This is great post and would request you to keep on updating such information !!

  55. Aditya Prajapati says:

    I think this will help us a lot, and I appreciate the work of Zerodha team for making aware us about frauds and scams regarding trading.

  56. Sahebrao says:

    Dear Nithin,

    You are doing good job of alerting investors of capital market. Good ! Keep it up !

  57. Mahendra says:

    Hello Nithin,
    Thank you for coming up with such good idea. I would like to know if you can conduct some classes at nominal price as part of educating investors on how to trade so that they will be aware of the basics of trading. Once they know the basics, they can based on their interest learn more in order to to have a good source of income. Moreover, the majority of people who enter trading are the ones from the tax paying class and certainly on their behalf I request you to start something which will significantly improve their wealth thereby the wealth for India.:)

  58. Aravinthan ID says:

    Very good intiative. Kudos to a Zerodha!

  59. Rohit says:

    Valuable information.

  60. Hrishikesh says:

    That is really a good initiative.

  61. AK Pradhan says:

    Valuable Info for all,But i wonder How does the Contact Nos n detail are available for the fraudster or scammers??? Is it from the Brokerage companies or Sebi?? How do the fraudster only targets small retail Investor into such scam??

  62. Adi says:

    Very good and informative article for beginners who easily fall prey to such scam

  63. Anil Kumar Mahajan says:

    Valuable information. Thanks

  64. Yogesh says:

    Excellent. Today I am proud to be part of Zerodha.
    You guys are taking small steps for the sake of small Investors.
    Thank you.

  65. Vijaykumar says:

    I really appreciate the awareness you are spreading , it’s very very special of you ZERODHA…
    GOD BLESS this team
    ..

  66. Dev says:

    Loved it , I just love every post and every idea you share. Wish to meet you and have a long chat/interview.

    Thanks again

  67. Anita says:

    Thank you so much for sharing this piece of information,which will help us to be extra conscious ..

  68. nagaraj says:

    sir
    i think something wrong is going on, in option market as well, could you please share your opinion on this…….?
    is option market sacrosanct…..?

  69. V T VISHWANATH says:

    If you added this feature 3 months before. I should have saved my money. Now I lost on pump and dump stock.

  70. Chandan says:

    Very good initiative Zerodha…

  71. Samrat says:

    Awesome information. Proud to be part of zerodha. Thanks for alerting us.

  72. G N Rao says:

    That’s the main reason I am registered with zerodha. Even HDFC securities do not have such helping attitude

  73. Vasudevanrknair says:

    Nice.. Zerodha I appreciate your social responsibility. Kudos. Tks.

  74. Yamanappa Ogennavar says:

    Very good initiative by Zerodha.
    Zerodha is helping small retail investors and also implementing steps to report frauds to Regulator.

    Thanks a lot

    Yamanappa Ogennavar

  75. Danda Ravinder Reddy says:

    It’s a good information for all investers

  76. yash says:

    Thank U Zerodha.

  77. Debodip Sen says:

    Thank you zerodha for informing.You guys are the best

  78. Simran says:

    No other broker lets the client to trade in illiquid options…..So you should also block such options for the investors.

    And work on your platform…thts been the major cause of real losses when kite server times out….

    • Blanket blocking all options isn’t optimal, which is what a few brokers do (not all). When there are big moves, illiquid ones can become liquid instantly. Also, clients who hold existing positions which turned illiquid because of market moves, they should be able to exit at will.

  79. NARAYANASAMY B says:

    Good steps taken by Zerodha. Your care, concern and close & tireless watch are very essential to save your most of the innocent and genuine clients. Best wishes.

  80. Ujjal Mondal says:

    Valuable information. I have been cheated by Capital Via, an advisory company. And I have lost my money. More over I have cheated by another company for 2nd time. They have called me over mobile phone and made me compelled to bye the stocks of profin C. And it is running loss near about 96%. It has been cheated by Multiv advisory company. I never heard about this company. But I have lost. Now I am afraid to invest in stocks. Actually I have no knowledge in stock market. That’s why I needed some advice to invest. That was the cause of my loss.

  81. L KAMALAKSH RAO says:

    Sir
    Useful news.
    One more info.some ten ,twelve years ago,one of my dormant account was operated by a trader in the DP.Shocked at seeing a long list of trades which I had not done,for several days and tensed ,Ialerted the executive who immediately sacked the concerned fellow by name Pandu.
    I was foolish enough not to have downloaded the entire list of trades ,mostly intraday,.Because by the time I relogged after my complaint ,the entire thing had disappeared.
    Later I closed my account.
    The fact is this DP is one of the highest ranked one in the country.
    Nevertheless it is mandatory that small investors regularly log in ,at least once a week to ensure such things do not happen ,that is what I feel.

  82. Sandeep Aggarwal says:

    Whatever Zerodha is doing is just awesome.. Neat and clean trading atmosphere for traders.. No other brokerage ever thought of anything like this… Great..

  83. Chandan says:

    Valuable information 🙏👍👍

  84. Hassan says:

    This is nothing but a cover up. Can Zerodha exain how did these fraud companies even know that I trade on equity? And how did they get my phone nunber? Zerodha must be selling contact details of its clients to these fraudsters. If there’s another explanation, kindly enlighten. And pls stop pretending that u care.

    • Matti says:

      Hey Hassan, we don’t share customer contact details with third-parties. However, the issue of these fraudsters getting your contact information is an industry-wide issue that we are trying to fight. This is explained in more detail in this earlier blogpost.

  85. Niranjan says:

    Thank you , very valuable information.

  86. Selva says:

    Wait, I don’t get that penny stock part. Will I be penalized by the IT department just for trading in penny stocks.

    • No, not for just trading penny stocks. Assuming you bought some of the scammy penny stocks that is on IT department watchlist, made a lot of money out of it, then most likely you will get a notice asking for an explanation.

  87. Krishvanth Suresh says:

    🙇🙇🙇

  88. Manash Paul says:

    Being an account holder – We have a lot of trust on zerodha stature for best practices. Keep Roaring Zerodha.

  89. Narender says:

    It is very valuable information. Thank you Zerodha for making people educated and alerting about fraudsters.

  90. Shaw anand says:

    Zerodha must be selling contact details of its clients to these fraudsters. This is not a fare matter. How can they got clients number.

  91. MANJUNATH K says:

    Its really worth hearing from zerodha about fraudulent news by advisors and some of them saying themselves as reasearch team. thanks to zerodha team for helping their clients by posting this type of news and trying to take them in a right way

  92. Guruprashantha says:

    Hello Nithin
    It may not be new thing for you
    But for new investors its really a trap
    One Mr.Singh had notified you in agrophose mauria udyog and 7nr before the fall in case of big fall
    But you never responded.
    He sent mail on 21dec 2019
    And lc started from 26dec2019

    In other case of continental seeds I personally mailed to your support team and your team told they will see and there was no response.. And when I came to your office one of your executive named Salish told me that base on one or two whistle blower warning we can not react..
    What a great customer concern ZERODHA have..

    • Guru, firstly what we are trying to offer as a business is a great execution platform at very low cost. We ideally don’t want to be part of any decision making and hence don’t’ track any stocks nor have never advised on any stock – buy/sell or otherwise. But that said, we realized with an increase in such cases over the last few months that we had to do something and can’t keep quiet. That is why this entire new feature was built so that we can alert our clients going forward (no other broker does this today).

  93. Khan says:

    firstly…Congrats and thank you Zerodha for educating us in timely manner. Also can someone throw a light about Trident because I already invested when stock split took place?

  94. sriram says:

    9986400738 is also fake

  95. Rajeev says:

    I have made Rs 5lakh loss in option trading. My own mistakes only reason. If I don’t want to show this during itr filing ,any action my be there from IT dept??

  96. MANOJ ANAND says:

    Excellent innovative idea. I am glad I chose zerodha. Thanks and keep it up.

  97. Syed says:

    This is a great initiative especially for someone who is new into trading/investment. Someone who has already burnt fingers on such trades would knew always there be chunk of people who would not know these traps.. Good job Zerodha!… hope to see this feature on mobile app too.

  98. Shiv says:

    I am the victims of that Midcapgains fraud. Please advice how to come out from this.

  99. Harsh Pandey says:

    @nithin sir
    I was viticm of a fraudelent circular option trading as described above by a fraudster.
    Please guide me how to proceeed with your compliance team

  100. Bhalchandra Dagadu Borhade says:

    Thanks.

  101. Simran says:

    Pump and dump is the most common fraud going on for a long time and nobody does anything.

    In the end investors have to be aware.

  102. Richard pinto says:

    It is very good information given by Zerodha to its customers
    Hats up Zerodha

  103. Kiran Kumar says:

    I got cheated in the same way.
    First they have given me profit for some days and they put money when nifty call option when market is going down or opposite way I lost also 1lak.

  104. Peter Salazar says:

    Great Work Nithin,
    Moneylife has an article on your initiative this morning . Well worth a read. They are highly respected KOL in consumer advocacy
    link here

    https://www.moneylife.in/article/zerodha-takes-on-sebis-job-warns-investors-of-market-manipulation/59421.html

  105. Rajakumar says:

    My query – I see you highlight a stock as Penny stock and ask us to be cautious at the same time You have it more than 5 small cases. What’s the deal here?

    • Matti says:

      Hey, as the post says, all penny stocks (stocks that have marketcap of less than 100 Cr.) needn’t be bad companies. We only show companies as penny stocks based on the marketcap. In any case, can you share the list of stocks you’re talking about? Will check.

  106. JAYASRI says:

    When It will get implemente in kite too?

  107. Suyog Patil says:

    Excellent information about stock market awareness….keep it up Nitin and team Zerodha

  108. Praveen Saraswat says:

    If penny stocks are illegal to trade or Invest why they are first listed in any of stock exchange?

    • Matti says:

      Hey Praveen, it is not illegal to trade penny stocks. These may have been companies that went bad after they were listed and the stock price is now being manipulated by unsavoury parties.

  109. Selvamohan says:

    Zerodha cares for its customers as well is a very ethical discount broker of NSE. Great work, Nithin & Team. Highly appreciated.

  110. Kishan says:

    Good information here, We must need to ignore fraud message and calls, i have received many calls from MP state and from other city for stock market related, don’t know who is sharing our phone number with this fraud people, Government & Zerodha and like other company must be take action on these and also our personal information i think not secure and someone sold that’s why this fraud person reach us via mobile number or email.

  111. Bharamagouda says:

    Thank you so much for your concern towards your customers ,,keep caring us !!
    Thank you

  112. Harmanjot singh says:

    Another pump and dump stock is
    PROFIN CAPITAL

  113. Khushal says:

    Hello Nithin Kamath Sir,

    Quite good information shared

    Do we have the Option to check the IV of Options in Kite? can we see it in the market depth too of the options?
    Zerodha has yet not introduced the option chain in Kite.
    We try to pull data from nse which is very typical to automate.
    I think generally pump and dump is mostly done on small cap stock where operator can operate the stocks off course in Options too.

    Anyway, thanks for such time to time refresher training.

    Khushal

  114. Purushotham says:

    Very useful information. Thanks for the concern shown towards traders who get cheated in stock market by fraudsters and giving useful advice as to how to not fall prey to fraudsters.

  115. Animesh Kurbetti says:

    Thank you team Zerodha for sharing such important information.
    It would have been very difficult for casual investors to get such information by surfing or through books.

  116. Sayli Kondhekar says:

    Hello Nithin,

    Such a nice initiative.

    Zerodha going the extra mile has enhanced the trust multifolds.

  117. ANIL says:

    Thank you team ZERODHA.
    recently I come across two such type of stocks. They are promoting their stocks through social Media, I wish to share that information with ZERODHA.

  118. Anil K says:

    Nithin, do you really think that the ltcg tax of 10% was imposed to trap the 20 or 200 operators making money thru this penny stock way. If the scale of the problem of black money conversion by this method was so big, don’t you think the government should improve their economic intelligence unit and nab these operators, rather than using a sledgehammer approach of a blanket tax that affects us all. We normal investors are thus paying for the governments inability to catch the crooks who manipulate these penny stocks. I don’t understand why it be so hard to catch these operators post facto especially since trading is entirely done digitally with traceability, KYC, pan, etc and what not.

  119. Anil K says:

    Nithin,
    Some readers, going by their comments, are under the impression that pump and dump of penny stocks is also done through options route.
    I think you should make it clear that options are only available in selected stocks of f&o segment that are selected based on criteria of liquidity, turnover, etc. They almost never include penny stocks.

  120. Anil K says:

    Nithin,

    Pls clarify about this article that is circulating on WhatsApp.

    Zerodha squares-off largest (78000 units of TATAMOTORS) unauthorized trade within 15 minutes of trade day while client got T+1 days. This caused the client a total loss of 84 Lakhs within a single transaction. The entire fault is due to Zerodha’s liquidation.

    The issue has been dealt with NSE arbitration panel which found Zerodha guilty. They Zerodha appealed, the appeal panel again found Zerodha guilty of unauthorized trade. Zerodha again trying to litigate the matter in court witout providing relief to the client.

    The compalint has been filed in the consumer forum for further resolution.

    The government and SEBI oftenly request the investors to be careful and again requesting everyone to Beware from such Companies. You can buy daily stuffs online, where major risk is not involved. But when it comes to Finance, you should not rely on such online companies. Do not put your hard earned money in such companies.

  121. Akhilesh Sanjeevi says:

    Dear Nithin,

    Really well written article. The steps being taken by Zerodha to protect the interest of their investors is impressive.
    Keep up the great work.

  122. Amrinder Singh says:

    Dear Nithin

    Thanks for the enlightening information.

    Regards

  123. Rajasekar says:

    same incident happen on 2017.. i lost 2 lacks do u have any comments on zerodha… my account 44k (-) on that day now it is interest add on 67k (-) it is an technical error said zerodha team call center…

  124. Sai Karthik says:

    Superb initiative by zerodha.. Thank you

  125. SATEJ PATIL says:

    Dear sit,
    I it is true.I also suffer from these fraud.3/4L.loss.and recent SMS fraud by global SMS of buy stocks AGRO PHOS,7NR retails, MARUTI udyog,Dargiling etc i have huge loss. What is solution to recover loss.pl.suggest.

  126. Rajib Lochan Dhibar says:

    Thank you very much Dear Nithin Kamath for posting such a nice article.
    Proper knowledge can conquer frauds.
    You are saving the leaves (from falling) of a growing tree.
    A tree cannot become big & huge without its leaves.

  127. Danda Ravinder Reddy says:

    It’s a good awareness of all investors

  128. Govind Dhoot says:

    I have holdings of Cafe coffe day shares in my portfolio. But now, They are not appearing in my portfolio.
    What can i do now???

  129. M. Subramanian says:

    Very informative and useful not only for beginners but also experienced stock investers. I am more than 30 years of experience but I am not knowing these type of frauds by manupulating and rigging. Other brokers are interested only on their commission and not on the well being of their clients. Only when the clients earn something they can continuesly contribute to their brokers. It should be a win win situation which Zerodha is doing by educating clients. Let your efforts continue for the well being of clients and in turn you also. Hats off to Zerodha.
    – M. Subramanian Client No. KZ5575

  130. ALOK says:

    I am really thankful to the Zerodha Management (specially to Mr. Kamath) for making us aware of various frauds happening in the market. I also request Zerodha management to start advising on stocks on daily basis as others like Icici, angel, Motilal etc. do. It could be a short term or long term suggestions on Fundamental or Technical categories. Small Investors like me will highly be benefited. It is the prerogative of the investor to accept or reject the suggestions offered by ZERODHA RESEARCH TEAM

  131. Vinod Mathew K says:

    I get tons of mails and sms promising huge returns..luring me. I just send them to trash box..
    Thanks Zerodha team

  132. Narasimha says:

    good instead of this while loggin into zerodha create a banner for the awareness
    this nudge will ask for additional confirmation while buying and selling due to which entry/exit ordes placing at market price will change
    one banner should be fine while logging in,no need to remind for every trade

  133. MADAN KUMAR RAM says:

    Main jharoda mein account open Kiya 1 month se jyada ho gaya all process complete ho gaya Bank proof PAN card aadhar card account opening charge de Diya abhi tak ID password nahin mila customer ko call nahin lag raha hai koi reply nahin aaya abhi Tak help me

  134. shailender deopa says:

    still not getting my userid , how to operate my account . already paid Rs300

    • Matti says:

      Hey Shailender, extremely sorry about that. We are seeing a high number of account opening applications right now, due to which account opening would be slightly delayed. We’ll email you your account details soon.

  135. shailender deopa says:

    our Digio account created successfully ? msg from your side . kiya hai yeah fraud toh ni hai

    • Matti says:

      Digio is our partner that we use for e-signing your account opening forms. It is a government certified entity. Nothing to be worried about.

  136. Rakesh Dhull says:

    Kindly improve your kite .It is the reason of people loosing their hard earn money. It is regular phenomenon of zerodha glitches 3-4 times in a week specially on expiry days.

    • Binoy Krishna Banerjee says:

      I have transferred an amount of Rs.4000.00 on 17 03 2020 through IMPS from my Linked a/c to ZERDHA linked HDFC bank account ending with a/c no.××××××××××1348not credited to my account till 22032020.7 days over.I want to know the problem.

  137. Hemad Pant says:

    Zerodha itself is a scam, terrible customer service and no integrity.

  138. Binoy Krishna Banerjee says:

    Not accounting properly.

  139. Murali Mohan Babu Nannuru says:

    Your efforts are simply superb.

  140. Saurabh says:

    I have zerodha account,last week on 25 March extra amount from my account deducted we are calling to customer care & local customer care nobody picking my phone my account I’d RY4577 name saurabh

  141. Ted says:

    Is there anyway to check if some unfair trading / option contracts which is illegal is done looking at your own account. Please help to find this out for our own accounts as many share the password to brokers / friends / aides / advisors / helpers including me

    Your response I Will be a great help

    • Matti says:

      You should never share your password with anyone. If you have, please reset your password immediately and don’t share it with anyone. If you share your account password, the liability of all trades done using the login details is on you.

  142. ILIGCG88 says:

    What if I want to trade in illiquid options?

    • Matti says:

      Since trades in illiquid options can lead to serious losses, we’ve blocked them as explained in the post above as a risk containment measure for all our customers, and that will remain so.

  143. VINOD KUMAR says:

    Many good suggestions I came to know from this feature. Helpful for newcomers.

  144. dimitru at ivtcysec-recovery dotTech says:

    online investing for me was a terrible experience, from forex to binary trading. i lost a lot of my savings and inheritance, i had to stop and request for my money back from plusoption and thats where i realized its all a scam and they have been manipulating me and my account. Now how do i get my money back? ill just say i got lucky coming in contact with someone who helped me get most of my money back. so now i have made up my mind not to try any of these

  145. PRADIP BHASKAR GUPTE says:

    User no QX9250

    Whether all future and options stocks are to be physically settled on expiry or only selected one

  146. Suresh says:

    Now I am trading through zerodha trading company.is it safe or not…Plz tell me…why.I am asking because a lot of amount cut of charges to my amount…

    • Matti says:

      Hey Suresh, Zerodha is completely safe. While our brokerage rates are very low, there are other taxes and exchange charges that you would need to take into account.

  147. PRADIP BHASKAR GUPTE says:

    USER no QX9250
    I understand that In money buy call options have to be physically settled on expiry but for every contract there is counter party who will be out of money in sell call option.
    What is position of that party in such situation

    • Matti says:

      Even the sell call option had to be physically settled if it’s ITM. The seller of the option has to deliver shares equal to the lot size.

  148. MD haamid khan says:

    i have deposited the fund value of xyz amount in zerodha from my bank account…suppose if deposited fund doesnt show to my zerodha account…what steps should i do to get mt money back…who would be liable for this money

  149. Komal says:

    I have opened an account in zerodga and the price for that us reducted from my account but i haven’t received any username and password till now, it’s been one week and i am checking daily on the app but it’s not processing forward…
    Please either help me get back my money or make my account ready by processing afterwords the digilocker page.. Please!!

  150. vignesh Dongare says:

    My SL was taken by zerodha even if I didn’t setup my SL

    This platform can take your SL without even price is not shown in exchange and also one which you keep SL trigger . they take your SL over and above your trigger SL setup for money setup..

    Enclosure : i have all the proofs for this trade.

    i know many of my friends here also have faced the same issue.

    I want clarification and my lost money back..

  151. Srihari says:

    Hey what is ril-be-re

  152. Naresh says:

    In future we need to very aware of stock market

  153. Gulshan Rai says:

    Seems like you guys are actually the SCAM.
    I have observed that web/mobile platforms execute additional order automatically which is very strange. I have observed this many times but ignored but when this happened again I thought I must ask you guys about it . It could be 2 things (a) its a software/platform glitch or (b) Zerodha is doing unethical practice. I would like to have a call from the support team regarding this issue. 
    I have attached a screenshot and you can clearly see that there are two BUY orders within 3 seconds , the first order at 14:57:40 was requested by me but not the second one at 14:57:43. How it is possible to have a second order in next 3 seconds. 
    I have noticed this several times and this is creating untrust. 

  154. Meera says:

    Recently I have invested on PMS service in which I have revealed my username and password to them. There was an intentional loss of 10 lakhs (opition trading) within a period of 5 days. Since there was no response from him I have lodged a complaint against him and it is in process. To get further assistance in this regard I contacted Zerodha help desk the reply was irrelevant for the first time and at the second time we dint get any reply.

    Ticket ID : 20200211276268 and 20200303744997

    will zerodha look into this issue?

  155. Nemish says:

    Hi Nitin,
    I trade in penny illiquid stocks, but due to your new policy, i have to mail you for purchase of such stocks, which i dont want to do. Can you disable this feature for me? Or you can have the option for opting in/out of this feature.
    What you have done is very good for Investors, but i would like to opt out.
    Thanks
    Nemish

  156. Shrikant says:

    *Sure Shot* BUY More *OMAXE* For

    – INTRA-DAY Target *206+*
    – THIS WEEK Target *210+*
    – FINAL Target *600+*

    Stock is Going *UP SAFELY* So *BUY MORE / INCREASE YOUR INVESTMENT*

    I receiving above message is it genuine or fraud

    • Matti says:

      All such messages should be treated as fraud. If someone knows that a stock is going to go up, they would buy it and not tell anyone. 🙂

  157. govind verma says:

    I am a Ex-Army personnel having Client ID-SE8696 with Zerodha Broker. Buy Justdial Share Quantity 300 @ Rs 367.26 per share on 18 Jun 2020 at 15:24:23h and sold the same on 19 Jun 2020 in the morning @ Rs 376 per share but it is showing Loss Rs 818.90 where as it should be Profit Rs (376-367.26)=2622/- and considerable loss in ZEEL shares. Please look into the matter, please pass necessary directions to your staff and extend necessary help to me. Thank you. Sending complaint this time as “Nind Nahi Aa rahi h”… who will listen my problems

  158. S.SUBHA says:

    Sir: today i received a msg from zerodha informing my account was logged in by unauthorized person in mexico. i did not reveal my userid and password to anyone and the message asked me to change the password and i changed immediately.
    1. You promptly sent a message and i changed my password.
    2. if Some persons may intend to cause loss to my account using options and futures?
    is it to happen?
    3. the person who fraudulently logged in, my get details of my account and transfer my cash?
    4 As i do not know futures and option, is there any way to remove these from my screen

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