5 important tips to protect yourself from pumping and dump fraud on the stock exchange

Indian investors have recently increasingly punished themselves through digital platforms such as whatsapp, telegram, text messages, Google Mail etc. to pump and pump dump fraud. These frauds follow false promises from enormous returns in a short time and attracted innocent retail investors to financial losses.

The basic idea behind all these fraudsters is to lure innocent traders and investors because of their greed by ensuring that they dream like scenarios with simple high returns and seamless long -term prosperity with minimal to no effort. Five important points that prevent you from becoming victims of these frauds are discussed below:

What are pump-and-dump fraud?

Pump-and-dump fraud generally consists of artificially driving the price of a share through the spread of false or misleading information. The price is inflated, ie pumped, then the shares are later unloaded, ie, i.e. sold aggressively on the open market, and the price falls when the fraud artists unload their shares and unsuspecting investors lose their property.

The frauds take place in thinly traded problems where manipulation is simple. Throughout traded, shares in which the size of the equity is small and very few people are able to actually control the entire delivery of the share and therefore easily manipulate the price.

What do the red flags have to pay attention to?

• Unrealistic returns: Avoid advice that displays high returns and inspires at short notice. It is always assumed that the Indian stock market achieves a return of 12% to 15% over three to five years. That is why they always keep their expectations in chess.
• Unwanted advice: Check the login information that the Sebi registration details, etc. The person who offers investment advice. Spammer have the usual claim to get to know each other through WhatsApp groups. Do not fall on unrealistic expectations and promise.
• Avoid suspicious links: Never click on the left or attachments sent by strangers because they are most likely phishing attacks. Concentrate on saving your data and never share important financial information such as card details, CVV, OTPS etc. Never Book Book have this Perzeine finance former.
• Pressure to act quickly: Be careful when you get messages in which you quickly invest to invest quickly. Remember fraudsters often create such stories to get them to make impulsive purchases.
• Non -registered or unknown stocks: This point emphasizes that all of the little -known or non -listed stocks are avoided. Fraudsters are usually aimed at shares with low liquid, in which price manipulation is easier, since these shares generally have lower trading volumes. Always check share details on leading websites such as: Sebi, NSE, BSE together with others to clearly understand the business first.

Protect yourself

To protect your investments, make sure that the investment website or the Sebi or RBI investment website is registered. Check your data protection settings from time to time and activate the two-factor authentication on your phone to protect your personal data. Never interact with unknown numbers or messages on WhatsApp casually.

Do you try to understand the real reason why someone sends you a message in which you are asked to take part in one or the other investment program? If you have the feeling that there is something fishing, report the authorities at the earliest.

Stay one step ahead: keep up to date

Stay up to date with the current market trends by giving real advice on real platforms such as Sebi and RBI, building knowledge and looking for professional advice. All of these ideas will make a major contribution to the definition of your heritage as a reasonable investor.

These simple steps keep you vigilant and safe from fraud. In this way you can protect your investments and overcome the pitfalls of WhatsApp shares.

Liability exclusion: This article only serves for information purposes and does not represent financial advice. Please consult a consultant registered by Sebi before making investment decisions.