If you are reading this article, it means you are investor/trader or you want to invest/trade in stock market. We all know that stock market has huge potential to earn. Some people do it as part-time and some people choose it as their career. Every day new and new people try to invest in stock market some get benefits and some lose their all money. So, we have to be aware of all those things which eat an investor or trader. There are various types of stock market scams of which we should aware of them. Most of the new investor or trader are affected by these scams because they do not know what these things actually are.
There is no way of shortcut to earn billions but their lots of shortcut to losing all the billions. So, try to be independent if you want to invest or trade in the stock market. Spend money on learning, not in shortcuts who gives temporary pleasure and permanent adverse effects.
In this article, I am going to discuss the three 3 biggest stock market scams.
1.) Pump and Dump Scheme (Stock Market Scams)
Pump and dump scheme is the most widely uses for scamming in the stock market. First, we figure out what is this: Pump and dump scheme means to increase the price of a particular share by increasing its demand. In other words, fraudsters buy shares in a large quantity of a bad company which has no fundamentals and creating loses from the several past years (or you can say a company which has no profit ).
After their purchases, they send start sending messages to the people who invest or trade in the stock market. Some of the messages which I received from the last few days are like “BUY AMMLTD AT @ 53.375 TARGET 200++. MARKET NEWS:- Appu Marketing Got tender from PSU bank for digital marketing” and the second one is “Alert – World top broker ( J.P Morgan ) taking 20% business stake of SAWACA Business MAC. Buy 1 lakh share of SAWABUSI @ at 3.62 Target 10″ and so on.
After these messages, I search and try to find the news taking the 20% stake in SAWACA Busines MAC by J.P Morgan but I can not find anywhere. There is no news for this and they don’t have financials I mean they are very weak.
So, the actual thing they do in this scam is first they buy in big quantity and then messaged some people to buy this stock it will go up in 10 days or something like that. And some of us purchase them and then fraudsters start selling their shares at a higher price and stock price start going up and up because the demand for that share has been increased.
Because the company’s financials are very weak so, the stock price cannot sustain on the higher price, at last, stock price start going down and we are creating our own loss. And one more thing when you want to sell them to cut your loss, you can’t because there is no one remaining who want to purchase these shares.
<>So, always ignore these messages otherwise you will lose your all money.
2. Tips and Recommendation (Stock Market Scams)
Firstly, the meaning, it means some people or stock adversary companies calls you and taught you to opt their tips and recommendation. The actual thing they do is: they give you tips every day for buying or selling a share and charge from you on the monthly basis. Also, they will tell you that they have more than 90 percent accuracy. I think everyone who invests or trade in the stock market has received these kinds of calls. But some us reject their calls because they knew it is a scam and some of us opt their scheme.
Let me tell you how they work, some them tell you to take their free trial calls and we think Okk it is free to let’s try. Then the actual scam start I will explain you by an example: assume they have to give 100 free trial calls, then they suggest 50 people to buy a share and to other 50 people suggests to sell the same share. Of course, one of a group of 50 people will get the benefit. So now they have 50 people next day they do the same thing suggest 25 people to buy and to other 25 suggest sell.
After taking two continuously good calls you get benefits, so those 25 people think to choose their service and pay them. But after you pay, you got bad tips and recommendation and you lose your all money.
So, be aware of these kinds of tips and recommendation, in fact, instead of paying them or taking any service of tips and recommendation, you should spend that money to learn about the stock market.
3. Messaged By Broker (Stock Market Scams)
Well, this is also another common and big scam in the stock market. Some people always rely on the tips and recommended provided by their brokers, however, it is not any kind of scam. But the scam more like it is not because fraudsters use big broker’s name as their own and send messages to the people. People who believe and invest in the tips provided by their brokers are most commonly affected by these type of scams.
Well, actually it is similar to the pump and dump scheme because all they (fraudster) want is to increase the demand for share so, they can sell at higher price. The difference between this and pump and dump scheme is the name of the sender. In pump and dump scheme you will receive messages from any number and in this case, you will receive by the broker’s name like some of the most commonly used these days: Sharekhan, Zerodha, Motilal Oswal and much more.
So, if you are one them who invests which is recommended by brokers then be aware otherwise scammers will eat your all money.
These kind of scams are increasing rapidly day by day. Even I receive a lot of messages and calls every day. So, I decided to write these most common stock market scams so one can understand the fact and save their money. Please share this article as much as you can, maybe your one share save someone’s money or career.