Glossary · PSX Mechanics
Pakistan Mercantile Exchange
Pakistan's commodity futures exchange that trades in gold, silver, crude oil, and agricultural commodities. Several PSX brokers also hold PMEX membership.
01—What is Pakistan Mercantile Exchange?
The definition — and what it means in practice.
Pakistan Mercantile Exchange (PMEX) is Pakistan’s commodity futures exchange, where standardised futures contracts are traded rather than company shares. Futures are derivatives whose value is linked to an underlying commodity, such as gold, silver, crude oil, or agricultural commodities. A futures contract sets key terms (like quantity and expiry) so buyers and sellers can trade exposure to that commodity through the exchange.
PMEX matters because it offers a different type of market risk and opportunity than equities on the Pakistan Stock Exchange (PSX). Commodity prices can move for reasons unrelated to company earnings, so futures may be used for diversification or hedging. They also introduce derivatives-specific features such as contract expiry, margin requirements, and the need to manage positions actively, which can change your risk profile versus simply holding shares.
If gold rises, a PMEX gold futures position can gain value; if it falls, it can lose—unlike owning a PSX share that depends on a company’s results.
- PMEX is Pakistan’s exchange for commodity futures, not a share market.
- Common underlying commodities include gold, silver, crude oil, and agricultural commodities.
- Futures are derivatives: prices reflect the underlying commodity and contract terms, including expiry.
- PMEX access may be available through brokers that also operate on the PSX.
02—How pakistan mercantile exchange works on the PSX
The Pakistan-specific rules, conventions, and numbers.
A retail investor in Pakistan most often encounters PMEX when their brokerage offers both equity trading on the Pakistan Stock Exchange (PSX) and commodity futures trading via PMEX membership. In that setup, you may use the same broker relationship while trading different products: shares on PSX and futures contracts on PMEX. Even though they are separate exchanges, the practical entry point for many investors is the broker’s platform and support.
It helps to separate PSX mechanics from futures mechanics. PSX share trading involves listed companies and follows PSX processes such as T+1 settlement, with investors identified by a Unique Investor Number (UIN) and shares held electronically at the Central Depository Company (CDC). PMEX trading, by contrast, is about futures contracts on commodities. The investor experience therefore shifts from analysing companies and dividends to managing contract exposure and expiry-driven position decisions.
03—Common misconceptions
Where investors most often get this wrong.
PMEX is just another name for the PSX.
They are different exchanges. PSX is for listed company shares, while PMEX is Pakistan’s exchange for commodity futures such as gold and crude oil.
Trading on PMEX means you are buying physical gold or oil.
A futures contract is a standardised financial contract linked to a commodity’s price. It gives price exposure under contract terms; it is not the same as taking physical delivery.
If I have a PSX account, I automatically can trade on PMEX.
Not necessarily. PMEX access depends on whether your broker provides it and what product access is enabled under your account setup.
04—Using pakistan mercantile exchange on BSL
Where this term shows up across the platform — with live data.
- Review key market concepts in the glossary.
- Learn how derivatives work via Futures Contract.
- Compare core equity-market plumbing on the Pakistan Stock Exchange.
- Understand position risk and funding basics in Leverage.
05—Frequently asked questions
What investors ask about pakistan mercantile exchange on the PSX.
Frequently Asked Questions
Pakistan Mercantile Exchange (PMEX) is Pakistan’s commodity futures exchange. It facilitates trading in futures linked to commodities such as gold, silver, crude oil, and agricultural commodities, using standardised contracts.
No. The Pakistan Stock Exchange (PSX) is for buying and selling listed company shares. PMEX is for trading commodity futures, which are derivatives linked to commodity prices and contract terms like expiry.
Yes. Several PSX brokers also hold PMEX membership, which can allow clients to access commodity futures through the same brokerage relationship, subject to the broker’s product offering and account setup.
PMEX trades commodity futures including gold, silver, crude oil, and agricultural commodities. The exact contracts available are defined by the exchange’s listed products and their standard contract specifications.
A PSX shareholding represents ownership in a listed company and may involve corporate actions such as dividends. A PMEX futures position is a derivative exposure to a commodity price under a contract that typically has an expiry, requiring active position management.
06—Related terms
Keep building the picture.
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.
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.
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).
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.
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.
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.
Put the term to work
Open a free BSL trading account
Understand the market, then trade it — live PSX data, screening tools, and a research desk that speaks plain English.