Dabba Trading in India: Everything You Need to Know Before Investing

A dishonest operator can potentially manipulate prices displayed inside their system.

They may claim that your position was closed at a different price, impose unexpected charges, widen spreads, or modify trading records.

Without independent exchange records, proving what actually happened can be challenging.

4. Excessive Leverage

High leverage is often marketed as an advantage, but it can become one of the biggest dangers.

Consider a trader who has ₹50,000 but takes a position worth ₹5 lakh.

A 2% adverse market movement equals:

₹5,00,000 × 2% = ₹10,000

A 10% adverse movement could potentially wipe out the trader's entire ₹50,000 capital, depending on the structure of the position.

Highly leveraged positions can therefore produce large losses very quickly.

5. No Ownership of Shares

In many dabba arrangements, investors are not actually purchasing the shares they believe they are trading.