‘Trade cautiously in illiquid stocks’

To safeguard the interests of investors, leading stock exchanges BSE and NSE have asked their trading members to take extra caution while trading in more than 300 illiquid stocks.

Illiquid stocks are those that cannot be sold easily because they see limited trading. These stocks pose higher risks to investors because it is difficult to find buyers for them as compared to frequently traded shares.

In similarly-worded circulars issued on Wednesday, both exchanges advised their trading members “to exercise additional due diligence while trading in these securities either on own account or on behalf of their clients.”