Dabba Trading is a non-regulated type of trading in India. The practice occurs without a regulated stock exchange, and thus the participants do not have access to the standard market protections. Prior to using any trading app or website, one should verify the legality and transparency of the service. SEBI warns investors against participating in such activities.
What Is an Illegal Trading App?
An illegal trading app appears to be a regular investment platform where live quotes, trading charts, account balances, and profit rates are displayed. The transactions performed within the platform may not be transferred to the regulated exchange at all.
This is one of the key risks associated with dabba trading as users are deprived of the usual exchange grievance and investor protection process.
1. Verify the Company/Broker’s Registration
It is vital to know the company’s status and whether or not the service is a legal investment service. An investment service must provide the details regarding its legal entity and the registration.
Do not believe that the trading app is legitimate because it has a professional website or mobile trading interface. Find information regarding the intermediary via the official regulatory sources prior to depositing funds.
In case of exchange-based trading, the intermediary should be SEBI registered.
2. Watch Out for Promises of Guaranteed Profits
Claims such as “guaranteed returns,” “daily fixed income,” “zero-loss trading,” or “quickly double your money” are warning signs.
The real trading involves certain risks, and no platform will guarantee the profit from each trade. NSE warns investors against various types of scams that use guaranteed return offers.
In case a trading app promotes guaranteed earnings rather than explains potential risks, fees, and legal aspects, be very careful and do not use the platform.
3. Avoid Downloading Unknown APK Files
One should be careful if a person receives an APK file from a trading website via WhatsApp, Telegram, Facebook, or another messaging channel.
Sometimes the fraudulent trading platform asks its users to download the trading app from a private link instead of downloading it from the regular app stores. Recent research uncovered various scam networks that promote illegal trading through websites and messaging platforms as well as private distribution of Android application.
Do not install any trading applications just because someone guarantees huge earnings.
4. Examine the Website
Professional website design does not necessarily mean that the trading platform is legitimate. Look for a proper company name, address, phone numbers, terms and conditions, privacy policy, information about risks and regulation.
Moreover, consider if there is consistency in the information provided on the website. If the platform provides uncertain information, it should be treated with suspicion.
For instance, Dabba Trading App warns users to study the service, check its regulation, examine fees and risks and to refrain from choosing a service due to profit guarantees.
5. Never Share Your Login Password
A dubious operator may request you to provide your login password, OTP code, bank accounts or other private information.
Do not share your information with strangers. Pay particular attention to the situation when a person asks for login information in order to trade on your behalf or to ensure guaranteed profits.
Cases concerning trading accounts handling and the requests for providing login information have been also warned officially.
6. Examine the Payment Request
Be especially attentive in regard to where you are required to make a payment. Suspicion should raise if an operator requests you to send money to his personal bank account or to some other wallets.
Check the official company and its payment methods independently before making any payments.
7. Distinguish Between an Authorized Broker and an Illegal Operator
A regulated broker acts in the financial market system and complies with all the rules. In turn, the illegal operator may simply refer to the market rates but keep trade operations in his register.
This difference should be taken into account. With an illegal Dabba Trading, grievance and protection system of exchanges may not be used.
Conclusion
In order to detect a fake trading platform, conduct thorough research. Check the registration of the platform, avoid any promises of profit, do not download suspicious APK file, protect your account information and confirm the details of payment before depositing money.
The website of Dabba Trading App states that the user should learn something first, compare different services, know risks and independently examine the legality of the service.
But the most important thing is that Dabba Trading is an illegal activity in India. For legitimate participation in the financial market, choose recognized exchanges and intermediaries.
