TV9
user profile
Sign In

By signing in or creating an account, you agree with Associated Broadcasting Company's Terms & Conditions and Privacy Policy.

Subscribe Whatsapp Channel
Bihar 2025 India Sports Tech World Business Career Religion Entertainment LifeStyle Photos Shorts Education Science Cities Videos

NSE warns against Pump and Dump scam; how to protect yourself | A guide

The National Stock Exchange of India (NSE) has released guidelines and advised investors to remain alert against 'pump and dump' stock market scams. These scamsters get involve in artificially inflating stock prices with false information, leading to significant investor losses when the price crashes.

How to protect yourself from Pump and Dump Scams, NSE releases guidelines
How to protect yourself from Pump and Dump Scams, NSE releases guidelines
| Updated on: Jul 14, 2025 | 01:20 PM

Mumbai: NSE has issued guidelines for stock market investors to educate them about ‘Pump and dump’ scams. In an attempt to caution the investors about such scams, the exchange said that scamsters use manipulative tactics to artificially increase a stock’s price using false information and then sell when the stock price is at the peak. This tactic leaves several investors with heavy losses.

NSE India has released some do’s and dont’s so that investors are in knowledge of how these tactics work, the risks involved, and how they can stay protected.

Also Read
Set up in 1992, NSE ushered in modern technology in the stock market such as trading in dematerialised stocks and Nifty 50 is its benchmark index crafted out of 50 prominent stocks. (Picture Credit: depositphotos)
What is NSE Nifty 50: Indices, stocks list, history details
SEBI to Drop "Penalty" Term for Brokers and their business to avoid stigma
SEBI plans dropping word "Penalty" in action against brokers to avoid stigma
SEBI Study: Rs 1 Lakh crore worth of loss for individual Futures and Options traders in FY25
91% of individual traders lost money in F&O trading in FY25: SEBI study

Pump and Dump Scam

Pump and Dump Scam is a fraudulent practice that may leave investors with significant losses. Scammers buy stocks in large quantities and then artificially inflate the price using fake news and hype. Scammers then sell these shares which results in crashing of the prices. The fraudulent practice is common in penny stocks.

How Pump and Dump Scam works

Scammers buy stock (low priced)

Create fake buzz

Stock price rises

Scammers sell

Prices crash leading to investors losses

How can investors protect themselves from Dump and Pump scam

  • Verify the information of stock from official sources like company website of NSE, BSE, etc
  • Avoid buying shares based on tips from unknown sources and social media influencers
  • Report suspicious activity to feedbk_invg@nse.co.in
  • While investing in the stock market, it is always good to consult a SEBI registered Research analyst.

Recently, Sebi released a study stating that 9 out of 10 individuals are incurring losses in Futures & Options (F&O) trades. The market regulator mentioned that the net losses of retail traders went up by 41 percent to Rs 1,05,603 crore in FY25 from Rs 74,812 crore in FY24, after accounting for transaction costs. “The percentage of traders making losses in EDS remained broadly unchanged at 91per cent from earlier study done by SEBI,” it stated.

Annual profits and losses of individual traders in EDS –FY22 to FY25

Year Net Profit (rs crore) No. of traders (lakhs) Lossmakers(%) Average per person P&L(Rs)
FY22 -4082442.790.20%-95517
FY23 -6574758.491.70%-112677
FY24 -7481286.391.10%-86728
FY25 -1056039691.00%-110069
Y-O-Y Change 41.00%11.00%NA 27.00%

(Disclaimer: (Disclaimer: This article is only meant to provide information. TV9 does not recommend buying or selling shares or subscriptions of any IPO, Mutual Funds and crypto assets.))

{{ articles_filter_432_widget.title }}