What Is Dabba Trading? The Hidden Risks You Must Know Before Investing

By Author: Close Friends Traders
Total Articles: 22
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Dabba Trading is an illegal and highly risky form of stock trading that operates outside the regulated exchanges like NSE and BSE. Originating from Gujarat, it involves transactions conducted through unregistered brokers — called Dabba operators — without any record maintained by SEBI. Trades are settled in cash, often over phone calls or informal software, and evade taxes, transaction fees, and legal scrutiny.

While Dabba trading may appear attractive due to its promises of quick profits, it poses severe risks including fraud, lack of investor protection, market manipulation, and exposure to criminal networks. Since these trades are untraceable, investors have no legal recourse in case of disputes or loss.

This parallel trading system affects India’s financial ecosystem by enabling black money circulation, tax evasion, and artificial price distortions in genuine markets. Despite ongoing regulatory crackdowns, Dabba trading still thrives in Tier 2 and Tier 3 cities due to a lack of awareness and enforcement.

For safer investing, traders must avoid Dabba trading and focus on SEBI-regulated platforms ...
... that ensure transparency, documentation, and investor protection. Understanding legal intraday strategies is key to building wealth while staying compliant.

Disclaimer: Close Friends Traders does not endorse or encourage Dabba trading. This article is for informational purposes only.
https://www.closefriendstraders.com/blogs/how-dabba-trading-work-the-underground-market-making-waves