Actually anything that is not traded through exchanges is called grey market trading,nick named Dabba Trading. In this the broker takes your order and just notes it down in his record.Sometimes it is passed on to some more persons,but it is their look out. Actually there is no counter buyer or seller. Your order is taken on tha assumption that 95 percent of traders lose money. So every loss the client makes is the profit of broker. This Dabba trading is illegal.Any default by broker cannot be challenged. Advantage is that everything is cash settled and so no question of tax or other levies. In Gujarat and Rajasthan the volume of this type of trading runs into multi crores and default rate is very rare.
