Do's and Dont's Stock Market

The Indian Stock Exchange has mentioned certain Do's and Don'ts for traders to follow while dealing in the stock market as there are attendant risks associated with it.

Below written Do’s and Dont's for Stock / Share Market Traders:

Do's

  • Always deal with the market intermediaries registered with Sebi/Exchanges.
  • Give clear and unambiguous instructions to your broker/agent/depository participant.
  • Always insist on contract notes from your Broker. In case of doubt of the transactions, verify the genuineness of the same on the Exchange website.
  • Always settle the dues through the normal banking channels with the market intermediaries.
  • Before placing an order with the market intermediaries please check about the credentials of the companies, its management, its fundamentals and recent announcements made by them and various other disclosures made under various Regulations. The sources of information are the websites of Exchanges and companies, databases of data vendor, business magazines etc.
  • Adopt trading/ investment strategies commensurate with your risk bearing capacity as all investments carry risk, the degree of which varies according to the investment strategy adopted.
  • Carry out due-diligence before registering as client with any intermediary. Further, the investors are requested to carefully read and understand the contents stated in the Risk Disclosure Document, which forms part of investor registration requirement for dealing through brokers in Stock Market.
  • Be cautious about stocks, which show a sudden spurt in price or trading activity, especially low price stocks.
  • Be informed that there are no guaranteed returns on investment in stock markets.

Dont's

  • Don't deal with unregistered brokers/sub-brokers, intermediaries.
  • Don't fall prey to promises of guaranteed returns.s
  • Don't get misled by companies showing approvals/registrations from government agencies as the approvals could be for certain other purposes and not for the securities you are buying.
  • Don't leave the custody of your Demat Transaction slip book in the hands of any intermediary.
  • Don't get carried away with onslaught of advertisements about the financial performance of companies in print and electronic media.
  • Don't blindly follow media reports on corporate developments, as they could be misleading.
  • Don't blindly imitate investment decisions of others who may have profited from their investment decisions.
  • Be informed that there are no guaranteed returns on investment in stock markets.

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