Understanding the Basics
Basic Concepts
Share
A share is a financial security that represents ownership in a publicly listed company. Shareholders are entitled to a portion of the company’s profits and assets.
Security Symbol
A unique identification code assigned to each listed security for trading purposes (e.g., ENGRO, OGDC).
Market
The trading environment where securities are bought and sold. Common market segments include:
- Regular Market
- Futures Market
- IPO Market
- Stock Index Futures
- Cash Settled Futures
Trading Segments
Types of Trading Markets
- Regular Market – Standard trading of shares
- Deliverable Futures Contracts – Contracts with physical delivery of shares
- Initial Public Offering (IPO) – First-time issuance of shares to the public
- Stock Index Futures Contracts (SIFC) – Futures based on market indices
- Cash Settled Futures (CSF) – Contracts settled in cash instead of delivery
Orders & Execution
Order & Trade Terminology
Buy (Bid Price)
The price at which an investor intends to purchase a security.
Buy Volume
Total number of shares an investor intends to buy.
Sell (Ask Price)
The price at which an investor intends to sell a security.
Sell Volume
Total number of shares an investor intends to sell.
Limit Order
An order placed to:
- Buy below market price
- Sell above market price
Ensures price control but not execution guarantee.
Market Order
An order executed immediately at the current market price, ensuring execution but not price certainty.
Stop-Loss Order
An automatic order to limit losses by triggering a buy/sell once a specified price level is reached.
Market Information
Price & Trading Data
Change (%)
Represents the percentage change in price compared to the previous closing:
- 🟢 Green → Price increase
- 🔴 Red → Price decrease
Volume
Total number of shares traded during a session.
Closing Price
The final traded price of a security at market close.
Previous Closing Price
The closing price from the previous trading session.
Average Price
Calculated as:
High Price
Highest traded price of the security during the session.
Low Price
Lowest traded price of the security during the session.
Trade Time
The exact time when a trade is executed.
IBTS
Trading System Windows (IBTS)
Market by Price (MBP)
Displays order queues grouped by price levels.
Market by Order (MBO)
Shows individual orders and total volume at each price level.
Confirmation Window
Displays:
- Order status
- Executed quantity
- Remaining shares
Trade Log
Provides a complete record of all executed trades in the account.
Outstanding Orders
Shows all pending/unexecuted orders.
PSX Rules
Market Structure (PSX Rules)
Market Lot
Minimum tradable quantity based on price range:
| Price Range (PKR) | Market Lot |
|---|---|
| Up to 100 | 500 Shares |
| 101 – 500 | 100 Shares |
| 501 – 1000 | 50 Shares |
| Above 1000 | 20 Shares |
Odd Lot Market (ODL)
- Trades below market lot size
- Minimum: 1 share
- Separate market exists for odd-lot trading
Advanced Knowledge
Advanced Trading Concepts
Short Selling
Selling a security without owning it, expecting the price to decline and buying it back later at a lower price.
Spot Security
Securities traded to qualify for:
- Cash Dividend
- Bonus Shares
- Rights Issue
Leverage Buying (Margin Trading)
Buying securities using borrowed funds to increase exposure and potential returns (with higher risk).
Investment Management
Portfolio
Portfolio
A collection of investments (shares, securities) held by an investor.