Investing in the securities market carries inherent risks, and understanding those risks, as well as knowing how to address potential issues, is crucial for all investors. Discount brokers like Upstox have made market participation more accessible, but this accessibility underscores the importance of investor awareness regarding compliance, safety, and potential pitfalls.
Upstox Securities Pvt. Ltd. And its associated entity, RKSV Commodities India Pvt. Ltd., operate under strict regulatory frameworks established by the Securities and Exchange Board of India (SEBI). Upstox Securities is registered with SEBI under registration number INZ000315837, with membership codes NSE: 13942 and BSE: 6155. RKSV Commodities holds SEBI registration number INZ000015837 and MCX TM Code 46510. These registrations are vital for verifying the legitimacy of the firms and provide avenues for investors to seek redress. Investors can contact Upstox’s compliance officer, Mr. Kapil Jaikalyani, at [email protected] or RKSV’s compliance officer, Mr. Amit Lalan, at [email protected].
For complaints, Upstox provides dedicated email addresses: [email protected] and [email protected]. SEBI also offers an Online Dispute Resolution (ODR) portal for resolving disputes in the Indian Securities Market, accessible at https://smartodr.in/login. Investors can file complaints directly through the SCORES portal (https://scores.sebi.gov.in/), requiring details such as name, PAN, address, mobile number, and email ID for effective communication and speedy resolution.
Before investing, it is imperative to carefully review the Risk Disclosure Document as prescribed by SEBI, alongside Upstox’s Terms of Use and Privacy Policy. The securities market is inherently risky, and informed decision-making is paramount.
Data reveals a significant risk, particularly in derivatives trading. Specifically, nine out of ten individual traders in the equity Futures and Options Segment incur net losses. On average, those experiencing losses register a net trading loss of approximately ₹ 50,000, with additional transaction costs amounting to 28% of those losses. Even profitable traders incur transaction costs ranging from 15% to 50% of their profits, highlighting the impact of these fees on overall returns.
Effective risk management is a cornerstone of successful investing. Upstox emphasizes four key pillars of risk management: stop-loss orders, risk-reward ratio (RRR), risk per trade, and position sizing. A stop-loss order is designed to limit potential losses by automatically selling an asset when it reaches a predetermined price. For example, if a stock is purchased at ₹ 200 and a stop-loss is set at ₹ 198, the order will execute if the price falls to ₹ 198, preventing further losses. It’s important to set stop-losses logically, considering support and resistance levels, and to resist the urge to override them based on emotional reactions.
The risk-reward ratio (RRR) is a mathematical calculation used to assess the potential profit relative to the potential loss. A favorable RRR suggests a higher probability of a profitable trade. Determining an appropriate risk per trade and carefully considering position sizing are also crucial for managing overall portfolio risk.
Investors should be vigilant against unauthorized transactions. Updating mobile numbers with depository participants allows for real-time alerts on debit transactions. Similarly, updating contact information with stockbrokers enables the receipt of transaction information directly from the exchange. KYC (Know Your Customer) updates are also essential, as per exchange guidelines.
Several practices should be avoided, including sharing trading credentials (login IDs, passwords, OTPs), trading strategies, or position details. Investors should exercise caution when considering leveraged products or derivatives, particularly options, without a thorough understanding of the associated risks. Unsolicited investment tips received through platforms like WhatsApp, Telegram, or social media should be treated with skepticism. It is crucial to avoid trading based on recommendations from unauthorized or unregistered investment advisors.
Upstox explicitly states that it does not provide stock tips and has not authorized anyone to trade on behalf of others. Investors encountering individuals claiming affiliation with Upstox or RKSV offering such services should report them immediately to [email protected] and [email protected].
When considering mutual funds, remember that top-rated funds do not constitute investment advice. Research data is provided by Morningstar, and investors should carefully read the offer documents before investing. Upstox disclaims any liability arising from investment decisions. It’s important to note that these are not exchange-traded products, and Upstox acts solely as a distributor, meaning disputes are not subject to exchange investor redressal forums or arbitration mechanisms.
Finally, investors should be aware that cheques are no longer required for IPO subscriptions. simply providing the bank account number and signature authorizes the bank to make payment. Securities can only be accepted as margin by brokers through a pledge in the depository system.
