Why does the broker puts every stock in z category?

#1
I have my demat and trading account with indiabulls... recently they have been putting some stocks one by one in z category... i am not able to buy the stocks which are in z category... they say that there is too much volatility and there are operator workings hence they are in z category and you cannot buy them...

is it a common practice? is there any specific reason to do so?
 

Taurus1

Well-Known Member
#2
I suggest you stick to F&O stocks, z cat stocks are too dangerous to buy.
 

alroyraj

Well-Known Member
#3
I have my demat and trading account with indiabulls... recently they have been putting some stocks one by one in z category... i am not able to buy the stocks which are in z category... they say that there is too much volatility and there are operator workings hence they are in z category and you cannot buy them...

is it a common practice? is there any specific reason to do so?
It is in your best interest. Even I have an indiabulls account.
Look at it this way. IB gives a leverage of 12 times on cash or on equity held after haircut. SO in order to provide such a leverage that is twice or thrice competitors (Angel it seems 4X, Sharekhan 6X, IIFL 4X all i guess) ,it selects only the highly liquid counters.
Each brokerage has their own lists of stocks, so there is a tradeoff.
Another thing is that there might end up being more haircut for such stocks thus blocking capital so better to avoid it.
ps. I am stuck with one such counter so it hurts .:annoyed: