Glossary · PSX Mechanics
Brokerage Commission
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.
01—What is Brokerage Commission?
The definition — and what it means in practice.
Brokerage commission is the fee a broker charges for executing a trade on behalf of a client. It is usually calculated as a percentage of the transaction value (buy or sell) and is charged per transaction. On the Pakistan Stock Exchange (PSX), commission rates typically range between 0.1% and 0.5% per transaction, depending on the broker and the type of account or service level.
Commission matters because it directly reduces your net return: it adds to your cost when you buy and reduces your proceeds when you sell. For frequent trading or smaller trade sizes, commission can meaningfully increase your break-even point. It also affects how you compare strategies (for example, long-term investing versus short-term trading) and how you evaluate realised profits after fees.
If you buy shares worth Rs 100,000 and commission is 0.2%, you pay Rs 200 on the buy (and again when you sell).
Brokerage Commission = Trade Value × Commission Rate
Trade value is price × quantity (often in board lots); the rate is charged per transaction on buys and sells.
- Commission is a broker’s fee for executing your trade; it is typically a percentage of trade value.
- On the PSX, commission rates typically fall between 0.1% and 0.5% per transaction.
- Commission applies on both legs: buying and selling each incur their own fee.
- Higher trading frequency and smaller trades make commission a larger drag on performance.
- Always compare returns after costs, not just price movement.
02—How brokerage commission works on the PSX
The Pakistan-specific rules, conventions, and numbers.
On the PSX, investors place orders through a broker that holds a Trading Right Entitlement Certificate (TREC) licence. When your order is executed, the broker charges brokerage commission as part of the transaction costs. Because commission is usually charged per transaction, splitting an order into multiple smaller trades can increase total commission paid, even if the average price is similar.
PSX trades settle on a T+1 (one business day) basis and clear through the National Clearing Company of Pakistan Limited (NCCPL), with shares held electronically at the Central Depository Company (CDC). Commission is separate from the market mechanics of clearing and settlement, but it affects the cash you need for purchases and the net cash you receive on sales once the trade is completed.
03—Common misconceptions
Where investors most often get this wrong.
Commission is charged only when I make a profit.
Commission is charged for executing the trade, regardless of whether you gain or lose. It applies when you buy and when you sell.
All PSX brokers charge the same commission rate.
Commission can vary by broker and account arrangement. The PSX typically sees commission rates between 0.1% and 0.5% per transaction.
Commission is the only cost that affects my net proceeds.
Commission is a key cost, but other charges or taxes may also apply depending on the transaction and your status. Net results should be assessed after all applicable costs.
04—Using brokerage commission on BSL
Where this term shows up across the platform — with live data.
- Review the basics of market costs and terminology in the glossary.
- Explore listed shares and their trading activity before placing orders via Stocks.
- Filter shares by liquidity and other fields using the Stock Screener.
- Track broader conditions that can influence trading behaviour on the Market.
05—Frequently asked questions
What investors ask about brokerage commission on the PSX.
Frequently Asked Questions
Brokerage commission is the fee your broker charges to execute a buy or sell trade on the Pakistan Stock Exchange. It is commonly a percentage of the transaction value and is typically charged per transaction.
On the PSX, commission rates typically range between 0.1% and 0.5% per transaction. The exact rate depends on the broker and the account or service arrangement.
Yes. Commission is generally charged each time a trade is executed. That means you typically pay commission when you buy shares and again when you sell them.
No. Commission is a fee paid to the broker for execution. The bid–ask spread is the difference between the best available buy price (bid) and sell price (ask) in the market.
Because commission increases your effective purchase cost and reduces your sale proceeds, your investment needs a larger price move to break even. The impact is more noticeable when trading frequently or using smaller trade sizes.
06—Related terms
Keep building the picture.
A licensed financial intermediary authorised by the SECP to execute buy and sell orders on the Pakistan Stock Exchange on behalf of clients.
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.
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.
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.
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.
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.
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