Not to nit pick the great write up and well detailed points but there are plenty of reasons to recommend a call option over the stock. Investment needed is much less and risk is limited to the relatively smaller invested capital. If it's a short term momentum/speculative trade. Buying calls hedges a short position on actual stock (not the case here though). Call spreads are especially used opportunistically to take advantage of earnings announcement. Simply choosing a call option over the actual stock is not unethical/immoral.
I just think it's hard to justify recommending a call option over a stock in most instances especially when the target audience is the general public. Point taken though, thanks!
Classic case of front running. There was a similar case with a CNBC anchor (Hemant something) too who used his relatives account to front run stocks that they were going to advertise on their show. The day white collar crime gets treated as regular crime with harsh jail time is when such things will slow down until then greed, for lack of a better word, is tempting.
Wow. I've been telling these and will show this also to my wife who has recently started following some daily telegram recommendations to buy scrips I haven't even heard of. (Though in very miniscule qty)
Certainly not as LOL as YouTube pump and dump, but still it's a little LOL worthy if we consider that these are SEBI registered people who did this, and all that for what ?
Won't they make more money just from appearing on Zee or just keep doing their work?
Another question I had is how did SEBI catch this thing, I mean Nirmal guy was certainly careful to do it via different accounts, the amounts were comparatively small like 2 lacs
But then I realised, it wasn't as active, like people won't be lining up to get derivatives of these stocks right? Is it something like wearing red at a funeral where everyone is wearing white and you'll be sticking out?
SEBI has surveillance measures in place to catch any irrational spikes happening in the securities.
In Hindustan Copper's case, for instance, SEBI in its order shared that the average trading volume went from 23 options/minute before the recommendation to 242 contracts/minute in the 2-minutes after the recommendation, before stabling out at around 70/minute for the next 15 minutes.
If there is someone profiting out of this spike in this short a time period, it's not difficult to identify them! That said, it's possible that SEBI just got a tip about these folks. They're on television recommending a very particular stock option, that by itself is a major red flag.
Not to nit pick the great write up and well detailed points but there are plenty of reasons to recommend a call option over the stock. Investment needed is much less and risk is limited to the relatively smaller invested capital. If it's a short term momentum/speculative trade. Buying calls hedges a short position on actual stock (not the case here though). Call spreads are especially used opportunistically to take advantage of earnings announcement. Simply choosing a call option over the actual stock is not unethical/immoral.
I just think it's hard to justify recommending a call option over a stock in most instances especially when the target audience is the general public. Point taken though, thanks!
Classic case of front running. There was a similar case with a CNBC anchor (Hemant something) too who used his relatives account to front run stocks that they were going to advertise on their show. The day white collar crime gets treated as regular crime with harsh jail time is when such things will slow down until then greed, for lack of a better word, is tempting.
Wow. I've been telling these and will show this also to my wife who has recently started following some daily telegram recommendations to buy scrips I haven't even heard of. (Though in very miniscule qty)
Nice one.
Certainly not as LOL as YouTube pump and dump, but still it's a little LOL worthy if we consider that these are SEBI registered people who did this, and all that for what ?
Won't they make more money just from appearing on Zee or just keep doing their work?
Another question I had is how did SEBI catch this thing, I mean Nirmal guy was certainly careful to do it via different accounts, the amounts were comparatively small like 2 lacs
But then I realised, it wasn't as active, like people won't be lining up to get derivatives of these stocks right? Is it something like wearing red at a funeral where everyone is wearing white and you'll be sticking out?
Love reading your work, great stuff
SEBI has surveillance measures in place to catch any irrational spikes happening in the securities.
In Hindustan Copper's case, for instance, SEBI in its order shared that the average trading volume went from 23 options/minute before the recommendation to 242 contracts/minute in the 2-minutes after the recommendation, before stabling out at around 70/minute for the next 15 minutes.
If there is someone profiting out of this spike in this short a time period, it's not difficult to identify them! That said, it's possible that SEBI just got a tip about these folks. They're on television recommending a very particular stock option, that by itself is a major red flag.
Good on SEBI for noticing the small stuff...
They thought they pulled a 300 IQ move but SEBI brought the hammer down on their scam. A rare win for regulators