📌 What is Dabba Trading? (Illegal Off-Exchange Trading)
Dabba trading (also called bucket trading or box trading) is an illegal and unregulated form of stock market trading in India. In this system, trades are never executed on official stock exchanges like the National Stock Exchange (NSE) or Bombay Stock Exchange (BSE).
The Securities and Exchange Board of India (SEBI) has repeatedly warned that dabba trading is illegal and carries significant risk because it operates outside regulatory oversight. (SEBI Investor Alerts)
In dabba trading, what the investor perceives as buying or selling shares is actually recorded only in the operator’s private books. This means profits and losses are calculated internally by the platform, and there is no real transaction on a regulated exchange. (Economic Times Legal)
🧠 How Dabba Trading Works – Step by Step
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Investor deposits money – Users transfer funds to a platform or app claiming to offer stock trading.
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Trades appear executed – The platform provides an interface that looks like a real broker’s dashboard, showing buy/sell orders being “executed.”
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Trades are settled off-book – In reality, the platform does not send any orders to NSE or BSE. Profits or losses are calculated internally, often based on stock price movements. (Groww Blog)
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Internal records only – Investors receive fake trade histories, while all actual trades remain off-exchange.
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No regulatory protection – Because trades are off-exchange, there is no SEBI grievance redressal or legal protection if things go wrong. (SEBI Investor Alerts)
Essentially, dabba trading is like betting on stock price movements rather than participating in real market transactions.
⚠️ Why TradeBazaar Is Under Scrutiny
Recent reports have highlighted concerns about TradeBazaar and similar trading platforms. Allegations suggest that these platforms might be operating like dabba trading schemes.
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Trades appear to be executed, but there is no evidence of actual transactions on NSE or BSE.
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Users report delays or blocks in withdrawals, even when trades appear profitable.
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Platforms may aggressively promote high or guaranteed returns, creating the illusion of legitimate trading while operating off-exchange. (Azad Report)
Although there is no formal SEBI action publicly disclosed against TradeBazaar yet, the pattern of user complaints aligns with characteristics of illegal dabba trading operations.
📉 Risks and Consequences of Dabba Trading
Dabba trading exposes investors to multiple risks:
❌ Lack of Regulatory Oversight
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Trades are not executed on recognized exchanges, so protections provided by SEBI or the exchange do not apply.
❌ High Risk of Fraud
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Operators control the internal calculation of profits and losses, leaving room for manipulation.
❌ Legal Consequences
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Operating or promoting dabba trading violates the Securities Contracts (Regulation) Act, 1956, and the SEBI Act, 1992, among others.
❌ No Legal Recourse
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Investors cannot use SEBI’s grievance mechanism or exchange dispute resolution if they lose money. (SEBI Investor Alerts)
📌 Key Takeaways – TradeBazaar Explained
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Dabba trading is illegal because it operates off-exchange without SEBI oversight. (SEBI Investor Alerts)
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Platforms like TradeBazaar may be showing fake trades while users’ actual money never enters a regulated market. (Azad Report)
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SEBI and exchanges like NSE have repeatedly warned investors to avoid such platforms and trade only through registered brokers. (Economic Times Legal)
Advice for investors: Always verify that a broker is SEBI-registered, ensure trades are executed on recognized exchanges, and check that withdrawals are transparent and timely. If you suspect a platform is operating illegally, report to SEBI or local cyber police immediately.
