What is Nudge?
Nudges are realtime alerts shown on Kite, our trading platform, that warn users of risks associated with a particular trade, before they execute the trade. Nudge alerts show up on the order window.
Here are a few instances where a Nudge is displayed:
- Trade to Trade (T2T) stocks.
This Nudge is displayed when trading in T2T stocks. Exchanges move stocks that are extremely speculative or are suspected of price manipulation to the Trade to Trade (T2T) segment. Intraday and BTST trades are not allowed in the T2T segment since all buy and sell transactions will be compulsorily delivered (T+2 or T+1 settlement).
With delivery trades, the stocks sold are first debited from the demat account, and the stocks purchased are then credited to the demat account on T+2 day. See What are Trade to Trade or T2T stocks? to know more.
- Stocks circulated by unauthorised or unregistered entities via social media.
This Nudge is displayed if stock tips are circulated to manipulate a stock's price. See I am getting a lot of unsolicited stocks tips SMS messages ever since I opened a trading account, how do I stop these? to know how to report such messages.
- Stocks undergoing corporate action such as bonus or stock split.
This Nudge is displayed to inform the users that the sudden drop in the stock price is due to a corporate action and not because of a loss.
- Stocks undergoing Insolvency Resolution Process (IRP).
This Nudge is displayed for companies that are undergoing IRP, informing the users about the risks of investing in such companies. There is a high chance of losing the entire investment if the shares are extinguished as part of the acquisition of the company. To know more about IRP, see What does IRP (Insolvency resolution process) mean?
- Transacting in illiquid stocks.
Stocks with market cap under ₹100 Crores tend to be illiquid. They are also subject to price manipulation through pump and dump to move money illegally from one account to another. As an additional layer of security, investors are nudged to enable TOTP when trading in these stocks.
After the user clicks on Buy , they get a secondary prompt for this.
- Rights entitlement (RE).
This Nudge is displayed to educate clients that RE's are temporary listed rights which will lapse if not applied for with the chances of losing the entire investment. Hence, trading RE's can be risky.
- Stocks to be suspended.
This Nudge is displayed for stocks that are going to get suspended by exchanges. Buying these stocks could result in losing the entire capital invested. The reasons for suspension can vary. See What does suspension of trading in a stock mean?