PSX Essentials: Your Guide to the Pakistan Stock Exchange

The Pakistan Stock Exchange (PSX) is the country's only national stock exchange, formed in 2016 after the merger of the Karachi, Lahore, and Islamabad stock exchanges. It is where investors trade shares of over 500 listed companies, ranging from banking and cement to technology and oil & gas.

1. PSX Trading Hours

The PSX operates Monday to Friday (closed on weekends and public holidays). The trading day is divided into two sessions:

• Pre‑Open Session: 9:15 AM – 9:30 AM (order placement, modification, cancellation – no matching yet).
• Continuous Trading Session: 9:30 AM – 3:30 PM (orders are matched continuously).
• Closing Session: 3:30 PM – 3:45 PM (determines closing prices).

All times are Pakistan Standard Time (PKT).

2. Market Lots

On PSX, shares are traded in fixed quantities called market lots. The lot size depends on the share price:

• If share price is below Rs. 50 → one lot = 500 shares
• If share price is Rs. 50 or above → one lot = 100 shares

Example: To buy a stock priced at Rs. 30, you must buy at least 500 shares (total investment Rs. 15,000). For a stock at Rs. 100, the minimum is 100 shares (Rs. 10,000).

3. Order Types

To place a trade, you can use different order types:

• Market Order: Buy or sell immediately at the best available price. Execution is fast, but the price may slip (especially in volatile markets).
• Limit Order: Specify the exact price you want to buy or sell. The order will only execute if the market reaches your price. This gives you price control but may not fill.
• Stop Loss: An order to sell if the price falls below a certain level – used to limit losses.

Virtual trading on PSE supports all these order types. Real brokerages offer similar functionality.

4. Settlement Cycle – T+2

When you buy or sell shares, the actual transfer of shares and money takes place after two business days. This is called T+2 settlement (T = trade date). For example:

• Trade on Monday → settlement on Wednesday (if no holiday).
• Trade on Thursday → settlement on Monday (excluding weekends).

In virtual trading (PSE), settlement is instantaneous for learning purposes. In real markets, you must have sufficient funds in your brokerage account before buying, and shares must be in your account before selling (no short selling without a margin account).

5. KSE-100 Index

The KSE-100 Index is the most followed benchmark of the PSX. It includes the top 100 companies based on market capitalization and liquidity. When you hear “market is up 500 points”, it means the KSE-100 has increased by 500 points.

The index is calculated using a free‑float market capitalization method – only shares available for trading (not held by promoters or strategic investors) are counted. This gives a more accurate picture of the market’s movement.

6. How to Start Trading on PSX

To trade with real money, you need:

1. A CDC (Central Depository Company) account – to hold your shares electronically.
2. A brokerage account with a PSX‑licensed broker – to execute trades.
3. A bank account linked to your brokerage account for fund transfers.

Most brokers provide an online trading platform (web or mobile). You can also open a Roshan Digital Account (for overseas Pakistanis) to invest in PSX.