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Do Not Let Anyone Trade In Your Trading Account

Open ZERO Brokerage FREE Share Trading Account - Buy and Sell Stocks Without Brokerage - Set GTT (Good Till Triggered) Orders on System and Forget

Traditional brokers charge a lot for brokerage; however, this broker does not charge anything for stock buying and selling. Also, you can set GTT (Good Till Triggered) order after buying a stock, so that the system can sell the stock automatically at your target price even if you are not monitoring the market. Only 25k is blocked for option selling with hedge. Also, you get a lifetime free account in Sensibull (virtual trading app & strategy builder) which charges Rs.800/-+GST a month. Learn option hedging strategy if you open an account today. It takes 5 minutes to open an account online. Click here and Open Free Account with Them Today >>

I keep getting calls from people all around India telling me that they have allowed someone else to trade in their account and are now losing money heavily. Do not let anyone else trade in your account. Keep your account username and password secured like you keep your bank account password secured. Let us see what damage it can do.

Out of greed/expectation/laziness/in faith or for whatever reason people let someone else (mostly brokers) trade in their account.

This is a a very bad practice and should never be done. Do not allow anyone whether your broker or friend or relative trade in your account on your behalf. You do not know what they have in mind and what they may do to your account.

I hope you have an idea of trading fraud. Trading fraud is shorting a low liquid stock in huge quantity in someone else account and when the stock falls buy in their own account. When the stock rebounds, they immediately sell for a profit.

Of course this is not possible in a small account but possible in a big account like 10 lakhs and above. For Intraday shorting 5x (five times) leverage is given. So a 10 lakh account can short a stock intraday for 50 lakhs. For a low volume stock this is a huge short and immediately the stock will fall, giving a great opportunity for a trading fraudster to make 5 times the money in his account in a single day.

Look at this PC Jewellers stock price on 2-Feb-2018. The stock opened at 460, went down all the way to around 220 and bounced back to around 400. All within minutes. Imagine if someone bought the stock with 5 times intraday leverage 10 lakhs at 220 and sold at 400. This would have resulted a profit of:

50,00,000/220 = 22727 stocks bought.

400-220 = 180*22727 = 40,90,860.00

That is a profit of Rs. 40,90,860.00 (40 lakhs 90 thousand 860) in a single day:

PC Jewellers stock price on 2-Feb-18

However the above is just an example. It may not have happened but I wanted to explain to you a fraud possibility. Who bears the loss of Rs. 40 lakhs 90 thousand 860? The person on whose account the stock was shorted.

May 6, 2010, Flash Crash was done by Navinder Singh Sarao, a trader who damaged stock markets in US sitting in his home. This was a United States trillion-dollar stock market crash done by not fraud as written above but spoofing algorithms. He made more than $40 million in profit from trading during the Flash Crash in a single day. Sarao was released on a £50,000 bail with a full extradition hearing scheduled for September with the US Department of Justice. No idea where he is now.

Spoofing is shorting millions of dollar of stocks and then cancelling immediately and then buying at the bottom. This is done in milliseconds by software. The world over now spoofing is banned. Now before placing an order a check is done. If you place a limit order for shorting stock, a check is done by system to see if the shorting is done within specified limits else the limit order is cancelled.

So do not let anyone trade on your behalf in your account.

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Traditional brokers charge a lot on brokerage, however this broker does not charge anything for stock buying and selling. Also, you can set a Good Till Cancelled order after buying stock so that the system can sell the stock automatically at your desired price even if you are not monitoring the market. Plus only 25k is blocked for option selling. It takes 5 minutes to open an account online. Click here and Open Stock Buy & Sell Free Account with Them Today >>

About the author: Dilip Shaw I started trading stock markets since 2007. However my first 3 years were losses. Then I dedicated almost 1 year on studying, researching, paper trading options and learned a lot in that time. Since 2011 I am trading Nifty options profitably. Call me if you need any help trading options on 9051143004.

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