• Invest
    Investment Suite
    Stocks
    Mutual Funds
    Future and Options
    IPO
    Exchange Traded Funds
    Commodity
    Stockcase (Stock Baskets)
    Currency
    Non Convertible Debentures
    Sovereign Gold Bond
    Exclusive
    NRI Account
    Private Client Group
    Features
    SipIt
    MTF
    Investment Suite
    Exclusive
    Features
  • Platform
    Product Suite
    Kotak Neo App & Web
    Nest Trading Terminal
    NEO Trade APIs
    Features and Tools
    MTF
    Securities Accepted as Collateral
    Margin Requirements
    Payoff Analyzer
    Calculators
    SIP Calculator
    Lumpsum Calculator
    Brokerage Calculator
    Margin Calculator
    MTF Calculator
    All Calculators
    Product Suite
    Features and Tools
    Calculators
  • Pricing
  • Research
    Research Calls
    Long Term calls
    Short Term calls
    Intraday calls
    Derivatives calls
    Pick of the week
    Top Monthly Picks
    Research Reports
    Fundamental Research Report
    Technical Research Report
    Derivative Research Report
    Research Calls
    Research Reports
  • Market
    Stocks
    Market Movers
    Large Cap
    Mid Cap
    Small Cap
    Indices
    Nifty 50
    Bank Nifty
    FinNifty
    Nifty Midcap India
    VIX
    All Indian Indices
    Mutual Funds
    SBI Mutual Funds
    HDFC Mutual Funds
    Axis Mutual Funds
    ICICI Prudential Mutual Funds
    Nippon India Mutual Funds
    All AMC's
    IPO
    Upcoming IPO
    Current IPO
    Closed IPO
    Recently Listed IPO
    Stocks
    Indices
    Mutual Funds
    IPO
  • Learn
    Resource
    Market Ready
    Kotak Insights
    Infographic
    Podcast
    Webinars
    Youtube Channel
    Quarterly Results
    Investing Guide
    Demat Account
    Trading Account
    Share Market
    Intraday Trading
    IPO
    Mutual Funds
    Commodities
    Currency
    Futures & Options
    Derivatives
    Margin Trading
    Events
    Budget 2024
    Muhurat Trading
    Share Market Holiday
    Market Outlook 2024
    Resource
    Investing Guide
    Events
  • Partner
    Business Associates
    Fund Expert
    Kotak Connect Plus
    Startup connect
  • Support
    FAQs
    Circulars
    Bulletins
    Contact Us
    Forms Download
    Get your Statement
​

3 Common Scams To Be Aware Of In The Indian Stock Market

  •  3 min
  • 0•
  • 13 Apr 2023

Investing in the Indian stock market is a lucrative proposition. Just be wary of scams. Many traders have lost money due to share market scams and fraud.

Common Stock Market Scams

1. Tip registration fraud

Unscrupulous stock market traders may assure you of yearly returns of over 40% if you register with them. But no one, not even Warren Buffet, earns more than about 20% a year!

These scamsters ask you to pay a registration fee in return for the best investment tips. Stay away from their tall promises.

2. Fake news about penny stocks

The penny stock segment is a frequent target of scams. A common tactic is to send fake news articles to investors.

For instance, a fake news article might state that a microcap company is being taken over by a large conglomerate. Here, the fraudsters themselves buy huge volumes of this stock beforehand. Believing the news, a large number of unsuspecting investors may also try to purchase the stocks.

Once the demand goes up, the culprits immediately sell their stocks. This makes the prices very volatile and it leads to losses for honest investors.

Related: Why do stock prices fluctuate?

3. Fake messages

Fraudulent traders may hack into your broker’s account. They may send fake messages related to the prices of some stocks. They do this to manipulate the prices of certain bulk stocks.

The fake messages may be sent to a large pool of the genuine broker’s customers. Thinking the messages to be true and trustworthy, investors may act accordingly, only to lose money later on.

How do you stay away from such scams? It may help to speak with your broker before investing. Carry out your own independent research as well.

Summing Up

All of these scams are quite common in the Indian stock market. Avoid falling prey to such fraudulent activity by staying informed and cautious.

It may help to open a trading account with a reliable and secure broker like Kotak Securities. That way, you also gain access to the latest news and market research.

Also Read:

Did you enjoy this article?

0 people liked this article.

What could we have done to make this article better?

Enjoy Free Demat Account Opening
+91 -

personImage
Enjoy Free Demat Account Opening
+91 -