Tuesday January 21, 2020
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S.E.B.I. tracks black money laundering in stock markets

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black money in stock market
by NewsGram Staff

black money in stock market

Stock market is one of the most preferred establishments for entities which indulge in money laundering and tax evasion. Securities and Exchange Board of India (S.E.B.I.) is all set to eliminate any scope for this with its decision to suspend trading in all the listed companies these entities use to accommodate such unfair practices.

Based on the three parameters set by the financial market regulator, if any company is found to fall under more than one of the criteria, it would suspend the shares of those entities and ensue appropriate action against them.

The parameters formed by S.E.B.I. include the mentioned address being non-existent, misuse of preferential allotment, and weak fundamentals that do not support price rise. It can be noted that preferential allotment is a major route for money laundering.

In its probe S.E.B.I. noticed ups-and-downs in prices in shares of the companies which were non-existent in reality. The shares were allotted preferentially to favorite entities and prices were pushed up without any fundamental basis, which was then followed by an exit by the investors.

In due course, the shares were sold back to the company or the entities translating big profits. S.E.B.I. noted that in such stocks fundamentals did not justify the price. Crores of rupees are involved in such illicit activities that pick momentum during the last few months of a fiscal year and are under the scanner.

Some listed firms and promotion channels have been found to offer regular services to offenders to help them in the tax evasion and laundering of black money.

The watchdog is contemplating a strong move against such entities to set an example.

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Ways to Make Money in the Stock Market

Adopt a suitable trading strategy to earn more money in the stock market

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Stock Market
Know about how to make profit in the stock market. Pixabay

Individuals who want to earn money in the stock market have plenty of choices to make. In addition to picking and choosing specific securities to trade, they first need to select a general trading strategy. Too many enthusiastic people jump into the market without a plan of attack, which can mean financial suicide.

The smart thing is to decide on an approach that makes sense for your level of risk tolerance, your financial resources and the amount of time you can give to the pursuit. Day traders, for example, often make the market their career, devoting every weekday morning and afternoon to the pursuit of profit. For the grand majority of us, however, other methods make more sense.

Peruse the list below and decide which one is the best fit for your personality, budget and schedule:

Long-Term Trading

Whether you have a little or a lot of money to invest, the long-term strategy can be a good fit for anyone. More than half of all people who buy and sell stocks online fall into this category. The beauty of working this way is that you can choose stocks that move slowly and build value over the long-haul. As long as you are patient and not worried about making a kill, this approach makes sense. Those who have self-directed retirement accounts often spend just a few hours each year re-balancing their portfolios. The drop shares that haven’t moved at all, add one or two new companies to the mix and leave it at that, until next year’s readjustment.

Stock market
In order to make more money in the stock market, individuals need to adopt a suitable trading strategy. Pixabay

Day Trading

If you have a strong stomach, at least $25,000 to put into a brokerage account and a lot of time on your hands, day trading could be your calling. Be ready for a few months of training, many sessions on a simulated platform and about a year of ramping up to full-time activity. Day traders usually hold no positions overnight but take their profits by scalping small price changes on large buys. If XYZ company, for example, is selling for $89.50 per share and suddenly goes up to $89.60, a day trader might buy 100 shares if the market indicates that the price will continue to rise to $90. That would mean a profit of $40 in the span of a few minutes, but 100 shares would cost close to $9,000.

Specializing in One or Two Securities

It’s becoming more common to specialize in just one or two companies. A big advantage to this style is the knowledge that comes with specialization. If you decide to only buy and sell shares of Microsoft and Walmart, for example, you’ll be pretty adept at spotting price changes before they occur.

Also Read- Traders Protest Government Collusion with Amazon, Flipkart: Report

Profiting from Precious Metal Stocks

Even people who are not keen on Wall Street in general often trade stocks based on the precious metals. This group includes companies that operate in the mining industry, which is a sector unto itself. Additionally, metals enthusiasts can buy and sell exchange traded funds (ETFs) that hold massive amounts of bullion. Silver and gold traders have been using ETFs and mining stocks to play the market for decades.