Share Trading in Karachi Stock Exchange

Share Trading in Karachi Stock Exchange

Today we will teach you that how we can trade in Karachi Stock Exchange. First of all you would open an account with your broker. The broker worked like an agent between the trader and stock Exchange and charge Commission for his services.

Account Opening Procedure.

First of all you can fill the form provided by the broker listed in Karachi stock exchange. You will provide different documents with your filled & signed form like your ID card, two ID cards of two witnesses etc. The account opening form will also be signed by two witnesses. This form will also be verified by your banker. The account opening normally takes one week to two weeks. Once your account is opened with your broker then you can trade in stock exchange by the following ways.

Selection of Broker

The selection of broker is very crucial; make sure that your broker is listed with Karachi stock exchange. Some important factor for selection of your broker is the experience of brokerage, history of brokerage, number of clients and financial strength. Some renowned broker of Karachi stock exchange are listed below

·         AKD Securities.

·         IGI Securities.

·         JS Global.

·         Arif Habib Securities.

·         BMA Capital.

·         KASB Securities.

·         Foundation Securities.

·         Elixir Security.

Minimum Deposit Amount

Different broker of Karachi stock exchange have different deposit requirement, however, majority of the brokers open your account for a deposit of 50,000/-. It is worthwhile to mention that this sum is very small for making huge profit from stock exchange in terms of capital gain. We understand that with this amount you can make little profit, however, can get huge experience of trading.

Commission Structure

Every broker in Karachi stock exchange has its own commission structure; however, as brokerage is a competitive market, therefore the commission structure of different brokers does not vary to a large extent. Commission structure of broker normally depends on the size of share. For low value share the commission rate is low and for high value share it is high.

The commission is usually charged in term of paisa on number of shares traded. For example .1 means 10 paisa commission shall be charged for each share traded. If you bought 1000 shares, then you would be charged a commission of 1000 x .1= Rs.100. The commission structure of renowned broker is given below

Upto 5 rupees	5 paisa
5- 100	7 Paisa
100-200	10 Paisa

It is important to mention that one side commission is charged on day trading, while two side commissions is charged on delivery.

 Deposit withdrawal

You can withdrawal your investment any time by selling your entire share (if any) and giving a request to your broker for a withdrawal of your whole or partial investment, the request normally processed in two to three working days.

Methods of Share Trading

In first method you can go to brokerage firm and you can directly trade in the shares the broker will book the order as per your instructions. You can also trade through your telephone by giving telephonic instructions/orders. You can also trade online from your house by using software provided by your broker.

Role of Broker

It is to be noted that broker charge commission for your trading irrespective of your losses or profit, whenever you book an order, the broker will charge commission. It is to be noted that broker would love to have more and more Trading orders from your side, because he is earning Commission on your trading. Therefore you must keep in mind the interest of Broker while he is giving tips for trading.

It is to be noted that equity market is a risk market, because no one in the world can precisely predict the market. Every prediction about the market is just a prediction. Therefore, it is important for you to put less focus on the prediction and more focus on the research.

Fundamental & Technical Analyses

Broadly we can divide the research into segments the first segment is your fundamental analysis and second segment is technical analysis.  The fundamental analysis primarily deals with the fundamentals of entity performance like profits, Earning per share etc, while the technical analysis deals with the behavior of a share in the stock exchange.

Source Data for Fundamental & Technical Analyses

For fundamental analysis you can read the audited financial statement of the organization, and for the technical analysis you can study the historical data of trading available in the stock exchange. The historical data is available in quantitative and in pictorial form /charts.

The more extensive & detailed research provides you more productive information for your trading decision or strategy.

Diversification

One important aspect of trading is diversification of your investment. It means you invest in couple of stock. Diversification is an effective strategy to minimize your trading risk; some people call it “Don’t put all eggs in one basket”.