Someone has suggested a stock Arogranite. While I was checking the stock at kite to buy a piece, a message from NUDGE was displayed stating that this particular script is a risky penny stock and i would need a TOTP to confirm buying. Stock price was above 60 rs. Till now I have heard that stocks having price under 10 rs are termed as penny stocks, then why Arogranite is a penny stock? Also, some other broking platforms are not asking for TOTP or stating that this is a risky penny stock. Can somebody please explain that what is the criteria under which the stocks are considered are high risk stocks or penny stocks, at kite?
Hey, Penny stock is just a fancy name, it’s not officially recognized by exchanges and regulations in India. It’s kind of true that under 10 is penny but not really.
That stock might be illiquid or it was being circulated as SMS (scam). In this case the activity will be monitored. Someone will pump and dump it, illegally by having retail traders account. Mostly it will be a phishing attempt.
So they now have more money power for conducting their scam. But they cannot do this when you have a TOTP which will change. Always have TOTPs in your account, it’s safer.
Also read this
So, just because it is not under 10rs doesn’t mean it’s safe.
Btw, don’t buy any stock on recommendation. Always, do your own research.
Thanks for your reply, it explained almost every thing.
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