Dabba Trading: Dabba Trading has once again returned to the stock market after huge fluctuations in the stock market and increasing crackdown by SEBI on Future & Options trading. According to market experts, the volume of illegal Dabba trading is estimated to increase to Rs 100 lakh crore per day, which is equal to 20 percent of the daily volume of futures and options.
No tax-fees in Dabba trading
In one of its reports, Financial Times quoted Dabba Trader as saying that people are adopting this trade due to low entry barrier. There is no need for any paperwork in Dabba Trading and no margin money has to be paid for doing business in it. Lot sizes are small and no tax fees have to be paid. Due to SEBI’s new Futures and Options guidelines, trade volume is expected to decrease by 40 percent. Due to which traders are shifting from Dabba trading to commodity trading and gaming platforms.
Dabba trading is illegal
In the report, regulatory authorities have expressed concern over the increasing trend of dabba trading. He says that this increases the risk for investors because SEBI has declared Dabba trading illegal because this trading is not done through any stock exchange. Investors cannot lodge any complaint in case of loss or stuck in Dabba trading. Umesh Kedia of Kedia Fincorp said that it is not that investors are not aware of the dangers of Dabba trading. He said, if investors suffer huge losses or the people carrying out these trades run away, then investors will not get their money back. According to Umesh Kedia, if the government reduces the tax on trading in shares similar to gold or silver, then it will help in curbing dabba trading.
Software also available for Dabba trading
Chetan Shenoy, director and head of product and research at Anand Rathi Wealth, said, despite being illegal, dabba trading exists because it makes quick profits. He said, investors who cannot trade in the futures and options market are attracted towards Dabba trading. Softpairs are also available in the market for Dabba trading market. Even if you Google Dabba Trading App, many trading forms links come up. In Dabba Trading, the broker has to connect the buyer and seller of the stock, in return for which he gets commission. In Dabba trading, the trader has to bid on the movement of the stock price and if the trade is right, he makes profit and if it goes wrong, he incurs loss.
Provision of penalty along with punishment in Dabba trading
Stock market regulator SEBI and stock exchanges have been continuously warning investors about the dangers of dabba trading. Besides, Dabba Regulation has also been declared illegal under the Securities Contract Regulation Act 1956. If found guilty in this case, there is a provision of imprisonment of up to 10 years along with a penalty of Rs 25 crore for investor traders.
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