Do listed company trade in their own scrip ? If yes ,how they do it
They can't really trade, as in intraday trade or very short term trades. But yes, most big listed firms have proprietary trading desks, which does buy and sell their own stock. All such trades have to be declared to the stock exchanges. We at Zerodha have a tool that lets you track all such insider trades intelligently, check this out.
That’s called Insider Trading. They do it normally like what usual buyers or sellers do in the retail market. They trade through the stock exchange only. Their trades have to be declared. Nithin has pointed the Insider Trading tool of zerodha, have a look at it. It will be intriguing to know such volumes on their own scrips being traded by them.
Also watch the movies listed under favorite movie Q&A, you will get some fair idea.
Yes, listed companies can trade on their own shares. But one should know more about insider trading.
You can go through SEBI prohibition of Insider trading Regulation, 1992.
This regulation tells
No insider shall either on his own behalf or on behalf of any other person, deal in securities of a company listed on any stock exchange [when in possession of] any unpublished price sensitive information.
So according this regulation one can trade on his own stocks, following all the regulations of SEBI prohibition of Insider trading Regulation, 1992.
The company shall specify a trading period, to be called “trading window”, for trading in the company’s securities. The trading window shall be closed during the time
- Declaration of financial results
- Declaration of dividends
- Issue of securities by way of public/rights/bonus etc
- Any major expansion plans or execution of new projects
- Amalgamation, mergers, takeovers and buy-back
- Disposal of whole or substantially whole of the undertaking.
All directors/officers/designated employees of the company shall conduct all their dealings in the securities of the Company only in a valid trading window and shall not deal in any transaction involving the purchase or sale of the company’s securities during the periods when trading window is closed, as during any other period as may be specified by the Company from time to time.