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Pakistan Stock Market Glossary
Every PSX term in plain English — localised to how the exchange actually works, from face-value dividends to T+1 settlement. Bookmark it; come back whenever a term stops you mid-sentence.
193 terms · 190 full guides · Written & reviewed by BSL Research
01—Browse A–Z
Jump to a letter. Terms with a full guide include the formula, PSX context, misconceptions, and a live example.
A
- Accrued InterestFull guide
- Interest that has been earned on a bond or fixed-income security but has not yet been received or paid. When a bond is bought between coupon payment dates, the buyer typically pays the seller the accrued interest for the period already elapsed. Read the full guide →
- Active InvestorFull guide
- An investor who regularly buys and sells securities, aiming to outperform the market through frequent trading decisions. Contrasts with a passive investor who holds positions over the long term with minimal activity. Read the full guide →
- Annual General MeetingAGMFull guide
- A yearly meeting held by a listed company where shareholders receive financial updates, vote on key decisions, and elect or re-elect board directors. Pakistani listed companies are required to hold AGMs under the Companies Act 2017. Read the full guide →
- Annual ReportFull guide
- A comprehensive document published by a listed company each year, covering financial statements, director reports, auditor opinions, and business performance. A primary source of fundamental research for PSX investors. Read the full guide →
- AnnuityFull guide
- A contract that guarantees a series of regular payments to an individual in exchange for a lump sum investment, typically used for retirement income purposes. Read the full guide →
- Ask PriceFull guide
- The lowest price a seller is willing to accept for a security. Also called the offer price. The difference between the ask and the bid price is called the spread. Read the full guide →
- AssetFull guide
- Anything of financial value owned by an individual, company, or institution. In investing, assets typically refer to stocks, bonds, cash, real estate, or commodities. Read the full guide →
- Asset AllocationFull guide
- The process of distributing investments across different asset classes, such as equities, fixed income, cash, and commodities, to balance risk and return based on an investor's goals and risk tolerance. Read the full guide →
- At-the-MoneyATMFull guide
- A term used in options trading where the strike price of the option is equal to the current market price of the underlying asset. Read the full guide →
- Audited AccountsFull guide
- Financial statements that have been independently reviewed and verified by a certified external auditor. Listed companies on the PSX are required to publish audited annual accounts. Read the full guide →
- Averaging DownFull guide
- The practice of buying additional shares of a stock as its price falls, thereby lowering the average cost per share. Can reduce losses if the price recovers, but increases exposure if it continues to fall. Read the full guide →
B
- Back-end loadFull guide
- A sales charge levied when mutual fund units are redeemed, rather than at the time of purchase, and is also known as a redemption fee or deferred sales charge. Read the full guide →
- Balance of PaymentsBOPFull guide
- A statistical statement that records all economic transactions between Pakistan and the rest of the world over a specific period, including trade in goods, services, and capital flows. Read the full guide →
- Balance SheetFull guide
- A financial statement showing a company's assets, liabilities, and shareholders' equity at a specific point in time. It is one of the three core financial statements used in fundamental analysis. Read the full guide →
- Balanced FundFull guide
- A mutual fund that invests in a mix of equities and fixed-income securities, balancing growth potential with income generation and capital preservation. Read the full guide →
- Banker's AcceptanceFull guide
- A short-term debt instrument issued by a company and guaranteed by a commercial bank. Commonly used in trade finance to facilitate import and export transactions. Read the full guide →
- BearFull guide
- An investor who anticipates falling prices in a stock or the broader market and takes positions accordingly, typically by selling or avoiding purchases in the expectation of buying back at a lower price later. Read the full guide →
- Bear MarketFull guide
- A market condition in which prices fall 20% or more from recent highs, typically over a sustained period. Usually accompanied by negative investor sentiment and economic slowdown. Read the full guide →
- BetaFull guide
- A measure of a stock's volatility relative to the broader market. A beta above 1 means the stock moves more sharply than the market in both directions. A beta below 1 suggests lower volatility. Read the full guide →
- Bid PriceFull guide
- The highest price a buyer is willing to pay for a security. The gap between the bid and ask price is the spread and represents the cost of trading. Read the full guide →
- Blue Chip StockFull guide
- Shares of a large, well-established, financially stable company with a long track record of reliable performance. On the PSX, names like OGDC, HBL, and Lucky Cement are commonly regarded as blue-chip stocks. Read the full guide →
- Board LotFull guide
- A standardised number of shares set for trading transactions on the PSX. In most cases, a board lot is 100 shares, though this can vary depending on the security's price level. Read the full guide →
- BondFull guide
- A fixed-income instrument representing a loan made by an investor to a borrower, typically a government or corporation. The borrower pays periodic interest and repays the principal at maturity. Read the full guide →
- Book ClosureBoard ClosureFull guide
- The period during which a company closes its shareholder register to determine who is eligible for a dividend, bonus shares, or rights issue. Investors must hold shares before the book closure date to qualify. Read the full guide →
- Book ValueFull guide
- The net asset value of a company is calculated by subtracting total liabilities from total assets. Book value per share is a common metric used to assess whether a stock is undervalued or overvalued. Read the full guide →
- Broad MoneyM2Full guide
- A measure of money supply used by the State Bank of Pakistan that includes currency in circulation, deposits with the SBP, and demand and time deposits held with scheduled banks and used to gauge overall liquidity in the economy. Read the full guide →
- Brokerage CommissionFull guide
- The fee charged by a broker for executing a trade on behalf of a client. On the PSX, commission rates typically range between 0.1% and 0.5% per transaction. Read the full guide →
- Brokerage FirmFull guide
- A licensed financial intermediary authorised by the SECP to execute buy and sell orders on the Pakistan Stock Exchange on behalf of clients. Read the full guide →
- BullFull guide
- An investor who anticipates rising prices in a stock or the broader market and takes positions, typically by buying securities, in the expectation of selling at a higher price later. Read the full guide →
- Bull MarketFull guide
- A market condition characterised by rising prices, strong investor confidence, and economic expansion and generally defined as a 20% or more rise from recent lows. Read the full guide →
- BuybackShare RepurchaseFull guide
- When a company buys back its own shares from the market, it reduces the number of shares in circulation. Can signal management's confidence in the company's value and increase earnings per share. Read the full guide →
C
- Capital GainFull guide
- The profit earned when a security is sold for more than its purchase price. In Pakistan, capital gains tax applies to gains from the sale of listed securities, with rates depending on the holding period. Read the full guide →
- Capital Gains TaxCGTFull guide
- A tax levied on profits from the sale of securities. In Pakistan, CGT on listed securities is calculated based on the length of time the shares were held. For instance, shorter holding periods attract higher rates. Filers and non-filers are taxed at different rates. Read the full guide →
- Capital MarketFull guide
- The market where long-term financial instruments such as stocks and bonds are issued and traded. The Pakistan Stock Exchange is Pakistan's primary capital market. Read the full guide →
- Carry-Over TradesBadlaFull guide
- Equity repurchase transactions used in the stock market to temporarily finance trades by speculators. Known locally as Badla, these transactions allow investors to carry positions forward by financing them short-term. Largely replaced by modern instruments like MTS and MFS on the PSX. Read the full guide →
- Cash DividendFull guide
- A direct payment made by a company to its shareholders, usually from profits, expressed as a rupee amount per share. Subject to withholding tax in Pakistan. Read the full guide →
- Cash MarketReady MarketFull guide
- The segment of the PSX where shares are bought and settled within the standard settlement cycle. It is the most common form of equity trading for retail investors. Read the full guide →
- Cash Settled FuturesCSFFull guide
- A derivative contract on the PSX where the settlement at expiry is made in cash rather than through physical delivery of shares. The difference between the contract price and the final settlement price is exchanged. Read the full guide →
- Central Depository CompanyCDCFull guide
- The institution responsible for maintaining electronic records of securities ownership in Pakistan. All PSX-traded shares are held in dematerialised form through the CDC. Investors access their holdings via a CDC Investor Account or through their broker's sub-account. Read the full guide →
- Circuit BreakerFull guide
- A regulatory mechanism that temporarily halts trading in a security or the entire market when prices move beyond a defined threshold. On the PSX, individual stocks generally have upper and lower price limits of 10% or Re 1, whichever is higher, per session to prevent extreme volatility. Read the full guide →
- Closed-End FundFull guide
- An investment fund that issues a fixed number of shares at inception. Unlike open-end mutual funds, its shares are not redeemed by the fund on demand but are bought and sold on the stock exchange like ordinary shares. Read the full guide →
- Commercial PaperFull guide
- A short-term, unsecured debt instrument issued by corporations to finance working capital needs. Typically has a maturity of a few days to one year and is generally issued by highly rated companies. Read the full guide →
- CommoditiesFull guide
- Raw materials or primary goods traded on exchanges, including oil, gold, silver, cotton, and wheat. In Pakistan, commodity futures are traded on the Pakistan Mercantile Exchange (PMEX). Read the full guide →
- Compound InterestFull guide
- Interest calculated on both the initial principal and the accumulated interest from previous periods. The foundation of long-term wealth creation is widely regarded as one of the most powerful forces in investing. Read the full guide →
- ConsolidationFull guide
- In technical analysis, a period where a stock's price moves sideways within a narrow range after a significant move. Often precedes a breakout in either direction. Read the full guide →
- Consumer Price IndexCPIFull guide
- A statistical measure tracking changes in the cost of a defined basket of goods and services over time, used to gauge inflation. The SBP and FBR both reference CPI in monetary and fiscal policy decisions. Read the full guide →
- Convertible SecurityFull guide
- A bond or preferred share that can be exchanged for a specified number of common shares of the same company. Offers the fixed-income benefits of a bond with the potential upside of equity conversion. Read the full guide →
- Corporate ActionFull guide
- Any event initiated by a listed company that affects its shareholders. Common corporate actions include dividends, bonus shares, rights issues, stock splits, and mergers. Read the full guide →
- CorrectionFull guide
- A short-term decline in the price of a stock or index, typically defined as a drop of 10% or more from a recent peak. Corrections are a normal part of market cycles and are distinct from a full bear market. Read the full guide →
- Coupon RateFull guide
- The annual interest rate payable on a bond, expressed as a percentage of its face value. A bond with a face value of PKR 1,000 and a 10% coupon rate pays PKR 100 in interest per year. Read the full guide →
- Credit RatingFull guide
- An independent assessment of a company's or government's ability to meet its financial obligations. In Pakistan, JCR-VIS and PACRA are the two primary credit rating agencies. Read the full guide →
- Current YieldFull guide
- The annual income from a security divided by its current market price, expressed as a percentage. Useful for comparing income return across different fixed-income or dividend-paying securities. Read the full guide →
- CustodianFull guide
- A financial institution, typically a bank or trust company, that holds a fund's or investor's securities and cash in safekeeping, ensuring their protection and proper accounting. Read the full guide →
D
- Day TradingFull guide
- The practice of buying and selling securities within the same trading session, with no positions held overnight. Requires significant discipline, speed, and risk management. Read the full guide →
- DebentureFull guide
- A bond that is not secured by any specific asset or collateral, relying instead on the general creditworthiness of the issuing company. Carries a higher risk than secured bonds and typically offers a higher interest rate. Read the full guide →
- Debt-to-Equity RatioD/EFull guide
- A financial ratio comparing a company's total debt to its shareholders' equity. A high D/E ratio indicates greater financial leverage and potentially higher risk. Read the full guide →
- DefaultFull guide
- The failure of a borrower, company or government to meet its debt obligations, including interest payments or principal repayment. Read the full guide →
- DelistingFull guide
- The removal of a company's shares from a stock exchange. Can be voluntary or involuntary. Involuntary delisting usually occurs due to regulatory non-compliance or financial distress. Read the full guide →
- DematerialisationFull guide
- The conversion of physical share certificates into electronic form. All PSX-listed securities are held in dematerialised form through the CDC. Read the full guide →
- DerivativeFull guide
- A financial instrument whose value is derived from an underlying asset such as a stock, index, commodity, or currency. Common derivatives include futures and options. Read the full guide →
- DividendFull guide
- A portion of a company's profits distributed to shareholders. Can be in the form of cash, bonus shares, or a combination of both. Read the full guide →
- Dividend YieldFull guide
- Annual dividend per share divided by the current share price, expressed as a percentage. A useful metric for income-focused investors is to compare dividend yields across different stocks. Read the full guide →
- Dollar Cost AveragingFull guide
- An investment strategy involving the purchase of a fixed rupee amount of a security at regular intervals, regardless of price. Results in buying more units when prices are low and fewer when prices are high, potentially reducing average cost over time. Read the full guide →
E
- EquityFull guide
- Ownership interest in a company, represented by shares. Equity holders are entitled to a share of profits and residual assets after liabilities are settled. Read the full guide →
- Equity ResearchFull guide
- Analysis conducted by financial analysts to evaluate the investment potential of listed companies. Covers financial performance, industry trends, valuation, and price targets. Read the full guide →
- Ex-Dividend DateFull guide
- The cutoff date for determining which shareholders are eligible to receive a declared dividend. Investors who buy shares on or after the ex-dividend date do not receive that particular dividend. Read the full guide →
- Exchange Traded FundETFFull guide
- A fund that tracks an index, sector, or asset class and trades on an exchange like a regular stock. The PSX lists several ETFs, including the JS Islamic Mutual Fund ETF and the Meezan Islamic ETF. Read the full guide →
F
- Face ValuePar ValueFull guide
- The nominal value of a share as stated in a company's charter. In Pakistan, most listed companies have a face value of PKR 10 per share, though this varies. For bonds, the face value is the amount repaid at maturity. Read the full guide →
- Fibonacci RetracementFull guide
- A technical analysis tool used to identify potential support and resistance levels based on the Fibonacci sequence. Traders use it to predict where a price pullback may pause or reverse. Read the full guide →
- Fixed IncomeFull guide
- Securities that pay a fixed return over a defined period, such as bonds or government securities. Generally considered lower risk than equities. Read the full guide →
- FloatFree FloatFull guide
- The portion of a company's shares available for public trading, excluding shares held by promoters, directors, or strategic investors. A higher free float generally means better liquidity. Read the full guide →
- FlotationFull guide
- The process by which a company's shares are offered on the stock market for the first time, allowing public investors to participate in its ownership. Read the full guide →
- Front-end LoadFull guide
- A sales charge levied at the time of purchasing mutual fund units. Reduces the actual amount invested from day one and is expressed as a percentage of the initial investment. Read the full guide →
- Fund ManagerFull guide
- A professional or institution responsible for making investment decisions on behalf of a mutual fund or portfolio. Tasked with maximising returns within the fund's stated objectives and risk parameters. Read the full guide →
- Fundamental AnalysisFull guide
- A method of evaluating a security by examining the underlying business, including financial statements, earnings, revenue, growth prospects, management quality, and economic conditions. Used to determine intrinsic value. Read the full guide →
- Futures ContractFull guide
- An agreement to buy or sell an asset at a predetermined price on a specified future date. On the PSX, single-stock cash-settled futures are available on select listed securities. Read the full guide →
G
- GDPGross Domestic ProductFull guide
- The total monetary value of all goods and services produced in a country over a specific period. A key macroeconomic indicator that influences corporate earnings and market direction. Read the full guide →
- Government SecuritiesFull guide
- Debt instruments issued by the Government of Pakistan to finance public expenditure. Include Treasury Bills (T-Bills) and Pakistan Investment Bonds (PIBs). Read the full guide →
- Growth StocksFull guide
- Shares of companies expected to grow earnings at an above-average rate compared to the broader market and typically characterised by low dividend yields and relatively high P/E ratios, as investors price in future earnings potential. Read the full guide →
H
- HaltFull guide
- A temporary suspension of trading in a particular security, ordered by the PSX or SECP. It can occur due to pending material announcements, unusual price movements, or regulatory concerns. Read the full guide →
- HedgingFull guide
- A risk management strategy that uses an offsetting position, often in derivatives, to reduce potential losses from adverse price movements in an existing position. Read the full guide →
I
- Income StatementProfit and Loss StatementFull guide
- A financial statement showing a company's revenues, expenses, and profits over a specific period. Used alongside the balance sheet and cash flow statement in fundamental analysis. Read the full guide →
- IndexFull guide
- A statistical measure tracking the performance of a selected group of securities. The KSE-100 Index is Pakistan's primary benchmark, representing the 100 largest companies listed on the PSX by market capitalisation. Read the full guide →
- Index FundFull guide
- A mutual fund designed to replicate the performance of a specific market index by holding the same securities in the same proportions. Offers broad market exposure at a lower cost than actively managed funds. Read the full guide →
- InflationFull guide
- The rate at which the general price level of goods and services rises over time, eroding purchasing power. High inflation typically squeezes corporate margins and can lead to interest rate hikes, which in turn affect equity valuations. Read the full guide →
- Initial Public OfferingIPOFull guide
- The first time a company offers its shares to the public on a stock exchange. On the PSX, IPOs are conducted through the e-IPO system. Successful IPOs often attract significant interest from both retail and institutional investors. Read the full guide →
- Insider TradingFull guide
- The illegal practice of trading securities based on material, non-public information is strictly prohibited under SECP regulations and subject to criminal prosecution in Pakistan. Read the full guide →
- Institutional InvestorFull guide
- A large organisation, such as a mutual fund, insurance company, pension fund, or bank, that invests substantial amounts of capital in financial markets. Institutional activity often drives significant price movements on the PSX. Read the full guide →
- Interest RateFull guide
- The cost of borrowing money, set by the State Bank of Pakistan through the policy rate. Rising interest rates generally weigh on equity valuations by increasing the discount rate applied to future earnings. Read the full guide →
- Intrinsic ValueFull guide
- The perceived true value of a security based on fundamental analysis, independent of its current market price. A stock trading below its intrinsic value is considered undervalued. Read the full guide →
K
- KIBORKarachi Interbank Offered RateFull guide
- The benchmark interest rate at which banks in Pakistan lend to each other on a short-term basis. Published daily by the SBP and widely used as a reference rate for corporate loans, floating-rate bonds, and other financial instruments. Read the full guide →
- KMI-30 IndexIndex page
- The Karachi Meezan Index, tracking the 30 most liquid Shariah-compliant stocks listed on the PSX. Serves as the benchmark for Islamic investors in Pakistan.
- KSE-100 IndexIndex page
- The primary benchmark index of the Pakistan Stock Exchange, comprising the 100 largest listed companies by market capitalisation across all sectors. Widely used as a barometer of Pakistan's equity market performance.
- KSE-30 IndexIndex page
- An index of the 30 largest and most liquid companies on the PSX, selected based on free-float market capitalisation and used as a tradable index for certain derivative products.
L
- LDCPLast Day Closing PriceFull guide
- The price at which a stock finished trading on the previous business day. Serves as the reference point for calculating the day's allowable price movement under the PSX's circuit breaker rules. Read the full guide →
- LeverageFull guide
- The use of borrowed funds to increase the size of an investment position. Leverage amplifies both potential gains and potential losses. On the PSX, leverage is available through margin trading and futures. Read the full guide →
- Limit OrderFull guide
- An instruction to buy or sell a security at a specific price or better. The order is only executed if the market reaches the specified price, giving the investor control over the execution price. Read the full guide →
- LiquidityFull guide
- The ease with which a security can be bought or sold without significantly affecting its price. High-liquidity stocks have large trading volumes and narrow bid-ask spreads. Read the full guide →
- Listed CompanyFull guide
- A company whose shares are officially traded on the Pakistan Stock Exchange, following SECP and PSX approval and compliance requirements. Read the full guide →
- Long PositionFull guide
- Owning a security with the expectation that its price will rise. The most common form of investing is buying shares and holding them. Read the full guide →
- Loss AversionFull guide
- A psychological tendency where investors feel the pain of losses more intensely than the pleasure of equivalent gains. One of the most studied concepts in behavioural finance is a common cause of poor trading decisions. Read the full guide →
M
- Management Expense RatioMERFull guide
- The total annual cost of operating a mutual fund expressed as a percentage of its average net assets. Includes management fees, administrative costs, and other operating expenses. A lower MER means a greater share of the fund's return flows to investors. Read the full guide →
- MarginFull guide
- The amount of capital an investor must deposit with a broker to open or maintain a leveraged position. Read the full guide →
- Margin CallFull guide
- A demand from a broker for an investor to deposit additional funds when the value of a margin account falls below the required minimum. Failure to meet a margin call can result in the forced liquidation of positions. Read the full guide →
- Margin Financing SystemMFSFull guide
- A PSX-regulated facility allowing investors to buy shares using financing provided by brokers or financial institutions, with the purchased shares serving as collateral. Read the full guide →
- Margin Trading SystemMTSFull guide
- A leveraged trading facility on the PSX that allows investors to take larger positions than their available capital. Positions must be settled within a defined period or rolled over. Read the full guide →
- Market CapitalisationFull guide
- The total market value of a company's outstanding shares, calculated by multiplying the share price by the number of shares in circulation and used to classify companies as large-cap, mid-cap, or small-cap. Read the full guide →
- Market OrderFull guide
- An instruction to buy or sell a security immediately at the best available current price. Guarantees execution but not the price at which the trade is filled. Read the full guide →
- Monetary PolicyFull guide
- The actions of the State Bank of Pakistan to control money supply and interest rates. Monetary policy decisions directly influence borrowing costs, inflation, and equity market valuations. Read the full guide →
- Money MarketFull guide
- The segment of the financial market where short-term debt instruments, such as Treasury Bills, commercial paper, and bankers' acceptances, are traded. Provides liquidity management for banks and institutions. Read the full guide →
- Money Market FundFull guide
- A mutual fund that invests primarily in short-term, low-risk instruments such as Treasury Bills and commercial paper. Suitable for investors seeking capital preservation and liquidity over returns. Read the full guide →
- Money MultiplierFull guide
- The ratio of broad money supply (M2) to reserve money (M0). Used to measure how much the banking system expands the money supply relative to the base money created by the State Bank of Pakistan. Read the full guide →
- Mortgage-backed SecuritiesMBSFull guide
- Certificates represent ownership in a pool of mortgages. Holders receive regular payments of principal and interest derived from the underlying mortgage payments. Read the full guide →
- Moving AverageFull guide
- A technical analysis tool that smooths out price data by calculating the average price of a security over a defined period. Commonly used to identify trends and potential entry or exit points. Read the full guide →
- Mutual FundFull guide
- A pooled investment vehicle managed by a professional fund manager. Investors buy units in the fund, which then invests in a diversified portfolio of securities. In Pakistan, mutual funds are regulated by the SECP and distributed through asset management companies. Read the full guide →
N
- Narrow MoneyM1Full guide
- A measure of money supply that includes currency in circulation, deposits with the State Bank of Pakistan, and demand deposits held with scheduled banks; a narrower measure of liquidity than M2. Read the full guide →
- NCCPLNational Clearing Company of Pakistan LimitedFull guide
- The entity responsible for clearing and settlement of trades executed on the PSX. Ensures that both the buyer and the seller receive shares and payment upon settlement of the trade. Read the full guide →
- Net Asset ValueNAVFull guide
- The per-unit value of a mutual fund, calculated by dividing the total value of the fund's assets minus liabilities by the number of outstanding units. Read the full guide →
- NITNational Investment TrustFull guide
- Pakistan's first and largest asset management company, managing various mutual funds. NIT has historically played a significant role in stabilising market sentiment through institutional participation on the PSX. Read the full guide →
- NomineeFull guide
- A person or institution that holds securities on behalf of the actual owner. The nominee appears on the register as the legal holder, but the beneficial ownership rests with the underlying investor. Read the full guide →
O
- Odd LotFull guide
- Any quantity of shares that is less than a standard board lot, typically fewer than 100 shares. Odd lots may sometimes attract a wider spread or be harder to execute at the best available price. Read the full guide →
- Open InterestFull guide
- The total number of outstanding futures or options contracts that have not been settled. Rising open interest generally indicates new money entering a trend. Read the full guide →
- Open-End FundFull guide
- A mutual fund that continuously issues and redeems units based on investor demand, with the number of units varying daily. Most mutual funds in Pakistan operate on an open-end basis. Read the full guide →
- OptionFull guide
- The right, but not the obligation, to buy or sell a security at a specified price within a defined period. The buyer pays a premium for this right. Options are used for hedging and speculation. Read the full guide →
- Order BookFull guide
- A real-time electronic record of all buy and sell orders for a security on the exchange, showing prices and quantities at each level. Read the full guide →
- Over-the-CounterOTCFull guide
- Securities are traded directly between two parties outside of a formal exchange. Less regulated and less transparent than exchange-traded markets. Read the full guide →
P
- P/E RatioPrice-to-Earnings RatioFull guide
- One of the most widely used valuation metrics. Calculated by dividing the current share price by earnings per share. A high P/E may suggest the market expects strong future growth; a low P/E may indicate undervaluation or declining prospects. Read the full guide →
- Pakistan Investment BondPIBFull guide
- A long-term government debt instrument issued by the Government of Pakistan, with maturities ranging from 3 to 30 years. Pays a fixed coupon rate on a semi-annual basis and is sold through primary dealers via auctions announced by the SBP. Read the full guide →
- Pakistan Mercantile ExchangePMEXFull guide
- Pakistan's commodity futures exchange that trades in gold, silver, crude oil, and agricultural commodities. Several PSX brokers also hold PMEX membership. Read the full guide →
- Pakistan Stock ExchangePSXFull guide
- The sole stock exchange in Pakistan, formed in 2016 through the merger of the Karachi, Lahore, and Islamabad stock exchanges. Headquartered in Karachi, the PSX lists over 500 companies across multiple sectors. Read the full guide →
- Passive InvestingFull guide
- An investment strategy that tracks a market index rather than attempting to outperform it through active stock selection. Lower cost and historically competitive with active management over long periods. Read the full guide →
- Payout DateFull guide
- The date on which a company actually distributes a declared dividend or bonus shares to eligible shareholders. This typically occurs several weeks after the book-closure period ends. Read the full guide →
- PortfolioFull guide
- The complete collection of financial investments held by an individual or institution, including stocks, bonds, mutual funds, and cash. Read the full guide →
- Portfolio DiversificationFull guide
- Spreading investments across different assets, sectors, or geographies to reduce the impact of any single position performing poorly. Read the full guide →
- Price-to-Book RatioP/BFull guide
- A valuation metric comparing a stock's market price to its book value per share. A P/B below 1 can indicate undervaluation, though context and sector norms matter significantly. Read the full guide →
- Primary MarketFull guide
- The market where new securities are issued for the first time, either through an IPO or subsequent share offering. Money raised goes directly to the issuing company. Read the full guide →
- Private CompanyFull guide
- A company that is not listed on a stock exchange and whose shares are not available for purchase by the general public. Ownership is restricted to a limited number of shareholders. Read the full guide →
- PrivatisationFull guide
- The transfer of ownership of a state-owned enterprise to private investors, typically through a public offering of shares. Pakistan has conducted several privatisations through the PSX over the years. Read the full guide →
- Profit TakingFull guide
- Selling a security after it has appreciated to realise gains. When widespread, profit-taking can temporarily push prices lower even in an otherwise bullish market. Read the full guide →
- PSX Data PortalFull guide
- The official data platform of the Pakistan Stock Exchange, providing market statistics, company financials, trading data, and index information. Read the full guide →
- Public Limited CompanyPLCFull guide
- A company whose shares are offered to the general public and traded freely on the open market. PLCs must meet minimum capital requirements and comply with SECP and PSX listing requirements. Read the full guide →
R
- RallyFull guide
- A period of sustained price increases in a stock or the broader market, often following a period of decline or consolidation. Read the full guide →
- Record DateFull guide
- The cutoff date set by a company to determine which shareholders are officially registered and therefore entitled to receive a declared dividend or corporate action benefit. Distinct from the payout date, which is when the distribution is actually made. Read the full guide →
- RepoReverse RepoFull guide
- A repo (repurchase agreement) is a short-term borrowing arrangement in which a party sells securities and agrees to repurchase them at a higher price on a specified date. A reverse repo is the same transaction from the buyer's perspective. The SBP uses repos and reverse repos as tools for open market operations to manage liquidity in the banking system. Read the full guide →
- Resistance LevelFull guide
- In technical analysis, a price level where selling pressure has historically been strong enough to prevent further upward movement. A breakout above resistance is often seen as a bullish signal. Read the full guide →
- Return on EquityROEFull guide
- A profitability ratio measuring how effectively a company generates profit from shareholders' equity. Calculated by dividing net income by average shareholders' equity. Read the full guide →
- Rights IssueFull guide
- An offer by a listed company to existing shareholders to purchase additional shares at a discounted price, in proportion to their current holdings. Used to raise new capital. Read the full guide →
- Risk ManagementFull guide
- The process of identifying, assessing, and controlling potential losses in an investment portfolio. Includes position sizing, stop-loss orders, diversification, and hedging. Read the full guide →
- Roshan Digital AccountRDAFull guide
- A financial account launched by the State Bank of Pakistan allowing overseas Pakistanis to invest in Pakistan's capital markets, including PSX equities and government securities, remotely without visiting a branch. Offers full repatriability of invested funds and returns. Read the full guide →
- RSIRelative Strength IndexFull guide
- A momentum indicator used in technical analysis that measures the speed and magnitude of price changes on a scale of 0 to 100. An RSI above 70 is typically interpreted as overbought, while an RSI below 30 suggests oversold conditions. Read the full guide →
S
- Sahulat AccountFull guide
- A simplified, low-cost brokerage account introduced by the PSX to encourage new and small investors to participate in the stock market. Designed with minimal documentation requirements and a straightforward fee structure. Read the full guide →
- Scheduled BanksFull guide
- Commercial and specialised banks listed under the State Bank of Pakistan Act 1956, authorised to accept deposits from the public and provide financial services. All major banks operating in Pakistan are scheduled banks. Read the full guide →
- SECPSecurities and Exchange Commission of PakistanFull guide
- The regulatory body responsible for overseeing Pakistan's capital markets, corporate sector, insurance industry, and non-banking financial companies. The SECP must license all PSX brokers. Read the full guide →
- SecuritiesFull guide
- A broad term for financial instruments representing ownership or a creditor relationship, including shares, bonds, and other capital market instruments traded on regulated exchanges. Read the full guide →
- SettlementFull guide
- The process of completing a trade by transferring shares to the buyer and cash to the seller. The PSX has moved toward a T+1 settlement cycle, meaning most trades are finalised one business day after the trade date. Read the full guide →
- Short SellingFull guide
- Shares that the seller does not currently own, with the intention of buying them back later at a lower price to profit from the decline. Heavily regulated in Pakistan and not widely available to retail investors. Read the full guide →
- SpreadFull guide
- The difference between the bid price and the ask price of a security. A narrow spread indicates high liquidity; a wide spread suggests lower liquidity and higher trading costs. Read the full guide →
- State Bank of PakistanSBPFull guide
- It is Pakistan's central bank, responsible for monetary policy, currency management, and financial system regulation. SBP decisions on interest rates and foreign exchange policy have a direct bearing on PSX market performance. Read the full guide →
- StockFull guide
- A unit of ownership in a company. Holding stocks makes you a shareholder, entitled to a proportional share of the company's assets and profits. Read the full guide →
- Stock MarketFull guide
- The marketplace where shares of publicly listed companies are bought and sold. In Pakistan, this refers to the Pakistan Stock Exchange and the ecosystem of brokers, regulators, and clearing institutions that support it. Read the full guide →
- Stock SplitFull guide
- A corporate action in which a company divides its existing shares into multiple shares, reducing the share price proportionally without changing the overall market capitalisation. Read the full guide →
- StockbrokerFull guide
- A licensed member of the stock exchange who executes buy and sell orders on behalf of clients and may also provide investment advice. All PSX stockbrokers must hold a valid TREC and be registered with the SECP. Read the full guide →
- Stop-Loss OrderFull guide
- An instruction to sell a security when it reaches a specified price, automatically limiting the investor's loss on a position. Read the full guide →
- Strip BondFull guide
- A bond from which the interest coupons have been separated and sold independently. The strip bond holder is entitled to the face value at maturity but receives no periodic interest payments. Read the full guide →
- SukukIslamic BondsFull guide
- Shariah-compliant securities representing fractional ownership in an underlying asset rather than a debt obligation. Unlike conventional bonds, which pay interest, Sukuk holders earn a share of the profit generated by the underlying asset; the Government of Pakistan issues Sukuk for both domestic and international markets. Read the full guide →
- Support LevelFull guide
- In technical analysis, a price level where buying interest has historically been strong enough to prevent further decline. A break below support is often seen as a bearish signal. Read the full guide →
T
- T+1 SettlementFull guide
- The current standard settlement cycle on the PSX, where trades are finalised one business day after the transaction date. The shift from T+2 to T+1 was implemented to reduce counterparty risk and improve market efficiency. Read the full guide →
- Technical AnalysisFull guide
- A method of evaluating securities by analysing historical price and volume data, using charts and indicators to forecast future price movements. Focuses on market behaviour rather than underlying business fundamentals. Read the full guide →
- Trading HaltFull guide
- A temporary suspension of trading in a security ordered by the PSX. Can be triggered by a pending announcement, unusual price activity, or regulatory action. Read the full guide →
- Trading Right Entitlement CertificateTRECFull guide
- The licence that authorises a brokerage firm to trade on the Pakistan Stock Exchange. All legitimate PSX brokers must hold a valid TREC issued by the PSX. Read the full guide →
- Treasury BillT-BillFull guide
- A short-term government debt instrument issued by the Government of Pakistan, with maturities of 3, 6, or 12 months. Sold at a discount to face value, with the return being the difference between the purchase price and the amount received at maturity. Considered one of the safest investments in Pakistan. Read the full guide →
- TrendFull guide
- The general direction of a market or security's price movement over a period of time. Markets trend upward (bullish), downward (bearish), or sideways (consolidation). Read the full guide →
U
- UndervaluedFull guide
- A security trading below its estimated intrinsic value. Value investors actively seek undervalued stocks, expecting the market to recognise and correct the mispricing eventually. Read the full guide →
- UnderwriterFull guide
- An investment firm or broker that purchases a new security issue from the issuing company and resells it to the public or institutional investors. Underwriters assume the risk that the securities may not be fully sold at the offering price. Read the full guide →
- Unique Investor NumberUINFull guide
- A unique identification number assigned to every investor registered on the PSX. Required to trade on the exchange. Issued by a licensed broker upon account opening. Read the full guide →
V
- ValuationFull guide
- The process of determining the current worth of a security or company. Common valuation methods include discounted cash flow analysis, P/E ratio comparison, and price-to-book analysis. Read the full guide →
- VolatilityFull guide
- The degree of price fluctuation in a security or market over a given period. High volatility means prices move sharply and unpredictably. Low volatility indicates steadier, more predictable movement. Read the full guide →
- VolumeFull guide
- The total number of shares traded in a security over a given period. Volume is a key indicator of market activity and the strength behind price movements. Read the full guide →
W
- WarrantFull guide
- A certificate issued by a company giving the holder the right to purchase shares at a specified price within a defined period. Warrants are often issued alongside bonds or preferred shares as an added incentive for investors. Read the full guide →
- Withholding TaxFull guide
- A tax deducted at source on dividends and other income in Pakistan. For tax filers, the withholding tax on dividends from listed companies is currently 15%. Non-filers face a higher rate. Read the full guide →
- Workers' RemittancesFull guide
- Transfers of money by Pakistanis working abroad to their families or accounts in Pakistan. A major component of Pakistan's balance of payments and a significant source of foreign exchange inflows that influence the broader economic environment affecting the PSX. Read the full guide →
Y
- YieldFull guide
- The income generated by an investment over a period, expressed as a percentage of the investment's cost or current market value. Dividend yield and bond yield are the most commonly referenced forms. Read the full guide →
- Yield CurveFull guide
- A graphical representation of the yields of government bonds of the same credit quality but different maturities. An upward-sloping curve reflects normal market conditions; an inverted yield curve is often interpreted as a signal of economic slowdown. Read the full guide →
- Yield to MaturityYTMFull guide
- The total return an investor would earn on a bond if held until its maturity date, accounting for all coupon payments and the difference between the purchase price and face value. The most comprehensive measure of a bond's return. Read the full guide →
Z
- Zero-Coupon BondFull guide
- A bond that pays no periodic interest. Issued at a deep discount to its face value and redeemed at full face value at maturity. The investor's return is the difference between the two. Treasury Bills are a common example of zero-coupon instruments. Read the full guide →
- Zero-Sum GameFull guide
- A situation where another's loss exactly offsets one participant's gain. Futures and options markets are zero-sum, unlike equity investing, where value can be created for all participants over time. Read the full guide →
02—FAQ
How to get the most out of the glossary.
Frequently Asked Questions
A plain-English reference for every term you'll meet investing on the Pakistan Stock Exchange — from account basics like the UIN and CDC to mechanics like book closure, circuit breakers, and T+1 settlement. Definitions are localised to how the PSX actually works.
Jump to a letter, or follow the ⓘ info icons that appear next to metrics across BSL's stock pages and screener — each links straight to the relevant definition. Terms with a full guide include the formula, PSX context, misconceptions, and live examples.
Entries are written and maintained by BSL's research team and reviewed on an ongoing basis; full guides carry their last-updated date.
Start with the trading-account basics (UIN, CDC, Sahulat Account), then dividends (dividend yield, book closure, ex-dividend date) and the valuation trio — EPS, P/E ratio, and market capitalisation.
Put the terms to work
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