Circular Trading is a fraudulent practice where the same shares or goods are repeatedly bought and sold among a group to create artificial volume or price movement.
In Circular Trading, a group of traders or entities coordinate transactions among themselves to give the illusion of high trading activity or rising prices.
There is no real change in ownership or value, but it misleads investors into believing there is genuine demand.
Such practices are illegal and strictly monitored by the Securities and Exchange Board of India.
"A group of traders repeatedly buys and sells the same stock among themselves to inflate its price—this is circular trading."