Stock market basics
A quick start for complete beginners to the Pakistan Stock Exchange — 20 short slides, about ten minutes. It covers what a share is, how to open an account, how PSX trading and T+1 settlement work, how to read the numbers on this site, Shariah screening, and the mistakes that cost beginners the most.
Welcome — your quick start to the stock market
This is a quick start for complete beginners to the Pakistan Stock Exchange. No jargon assumed, nothing to buy, and it takes about ten minutes.
By the end you'll know what a share actually is, how buying and selling works on PSX, how to read the numbers on this site, and the mistakes that cost beginners the most money.
You can leave any time — your place is saved, and you can replay this from the Learn page.
What is a share?
A share is a small piece of ownership in a company. Buy one share of a company that has issued 100 million shares, and you own one hundred-millionth of that business — its factories, its profits, its debts.
That ownership is why share prices move. If the company earns more than people expected, each slice of it becomes worth more, and buyers compete to own it. If it disappoints, the opposite.
A share is ownership of a real business, not a lottery ticket with a price attached.
What is the Pakistan Stock Exchange?
PSX is the single stock exchange in Pakistan — the marketplace where shares in listed Pakistani companies are bought and sold. Roughly 500–600 companies are listed, from banks and cement to fertiliser, textiles and tech.
The exchange itself doesn't set prices. It matches buyers with sellers, and the price is simply whatever the two sides most recently agreed on.
What you need before you can buy
You cannot trade on PSX directly. You need two things, and a licensed brokerage sets both up for you:
- A brokerage account — with a PSX-licensed broker, who places your orders into the exchange.
- A CDC sub-account — where your shares are actually held, electronically, in your name at the Central Depository Company. No paper certificates.
Your shares live at the CDC in your own name — your broker places orders, but doesn't hold your shares for you.
When the market is open
PSX trades Monday to Friday, mornings into the afternoon, with Friday split into two shorter sessions around the midday prayer break rather than running straight through.
Exact session timings are set by the exchange and do change — they shift during Ramadan, for instance — so check PSX's own published trading calendar rather than trusting any fixed times you read elsewhere, including here.
While it's open, PSX also caps how far a single stock can move in one session — a circuit breaker — to stop runaway panics. That limit is set by PSX/SECP and has changed over time, so check the current figure with your broker rather than assuming a number.
Prices only move while the market is open. Everything on StockPulse is end-of-day data, not a live ticker.
Market orders and limit orders
When you place an order, you choose how you want it filled:
- Market order — buy or sell right now, at whatever the best available price is. Fast, but you don't control the price.
- Limit order — buy or sell only at a price you specify, or better. You control the price, but it may never fill.
For a thinly traded stock, a market order can fill at a far worse price than the last one you saw. Limit orders protect you from that.
Settlement: T+1
Buying a share isn't instant. Settlement is the step where the shares and the money actually change hands.
Since February 2026, PSX settles on a T+1 cycle: shares you buy are credited, and money from shares you sell is released, about one business day after the trade. This replaced the older T+2 (two-day) cycle, so older guides you find online may still say T+2.
T+1 — one business day between trading and actually having the shares or the cash.
Reading a stock quote
Every stock page on this site opens with the same handful of numbers. They mean:
- Price — what one share last traded at, in rupees.
- Change — how much that's moved versus the previous close, in rupees and percent.
- Volume — how many shares changed hands. High volume means a lot of conviction behind the move; a stock trading a few thousand shares a day may be hard to sell when you want to.
Check the volume, not just the price. Low volume means you may not be able to get out easily.
Market cap and free float
Market capitalisation is the price of one share multiplied by every share the company has issued — in other words, what the market says the whole company is worth. It's the honest way to compare company sizes; share price alone tells you nothing, because a Rs. 500 share can belong to a far smaller company than a Rs. 30 one.
Free float is the slice of those shares actually available to the public — excluding stakes locked up by sponsors, the government or strategic holders. A small free float means a handful of trades can swing the price hard.
Share price tells you nothing about company size. Market cap does.
EPS and the P/E ratio
EPS (earnings per share) is the company's profit divided by its number of shares — its profit expressed per slice. PSX companies report it every quarter.
P/E (price-to-earnings) divides the share price by the last twelve months of EPS. It answers: how many rupees am I paying for each rupee of annual profit? A P/E of 10 means ten.
A P/E on its own is meaningless. It only tells you something next to the same company's own history, its sector, or a close peer. A low P/E can mean a bargain — or that the market expects profits to fall.
Never read a P/E in isolation. Always compare it to something.
Dividends — and a PSX quirk
A dividend is cash the company pays out to shareholders from its profits. Dividend yield expresses that as a percentage of the current share price — the cash return you'd get from holding, separate from any price gain.
The PSX quirk worth knowing: companies here announce dividends as a percentage of face value (usually Rs. 10 per share), not of the market price. A "50% dividend" means Rs. 5 per share — whether the stock trades at Rs. 40 or Rs. 400. StockPulse converts this into a real yield so stocks are actually comparable.
A "100% dividend" on PSX means Rs. 10 per share, not doubling your money.
Indexes and sectors
An index tracks a basket of stocks as one number, so you can see how the market as a whole is doing. The ones that matter on PSX:
- KSE 100 — the headline index, the 100 largest/most representative companies.
- KSE 30 — the 30 biggest, weighted by free float.
- KMI 30 — 30 Shariah-compliant companies.
- KSE All Share — everything listed.
Sectors move together. If every cement stock is up, that's a sector story, not a company story.
Corporate actions — the calendar matters
Listed companies must announce things that move their price, and those announcements run on a predictable cycle:
- Board meeting — directors meet to approve results or recommend a dividend. Announced in advance.
- AGM — shareholders vote to approve the dividend and elect directors.
- Book closure — the register is frozen to decide who actually receives a dividend or rights entitlement.
- Rights issue — existing shareholders get to buy new shares, usually below market price.
To receive a dividend you must hold the stock before its book closure date — buying after means you miss that one.
Technical analysis, briefly
Technical analysis reads price history rather than company fundamentals. Three indicators cover most of it:
- Moving averages — the average price over the last 50 or 200 days. Price above both usually means an established uptrend.
- RSI — how hard and fast price has moved lately. Above 70 is often called overbought, below 30 oversold.
- MACD — compares a fast and a slow moving average to show whether momentum is building or fading.
Every one of these is calculated from prices that already happened. None of them predict news.
The Signal Score
StockPulse combines those three indicators into a single score from −100 to +100, labelled from Strong Bearish through Neutral to Strong Bullish. It exists so no single indicator gets read in isolation.
It is mechanical — computed purely from past prices by a fixed formula. It knows nothing about earnings, news, management or anything forward-looking, and it is not a recommendation to buy or sell.
Treat the Signal Score as one input for further research, never as an instruction.
Shariah-compliant investing
If you want to invest Islamically, a stock has to pass two screens. First its core business must be halal — which rules out conventional banking and insurance, alcohol and gambling outright.
Then it must pass financial tests run jointly by PSX and Al Meezan under an SECP-approved methodology: limited conventional interest-bearing debt relative to assets, enough of its assets illiquid rather than cash, and only a small share of income from non-compliant sources.
Those thresholds get revised periodically — SECP tightened several of them in 2026 — so treat specific percentages as directional and check PSX's published KMI methodology for current figures.
Risk, honestly
Share prices fall as well as rise, and a listed company can lose most of its value or be delisted entirely. Money you will need within the next few years does not belong in the stock market.
Diversification is the one genuinely free protection: spreading across several companies and sectors means a single disaster can't wipe you out. One stock holding your entire savings is a bet, not an investment.
Never invest money you can't afford to leave invested through a bad year.
Mistakes beginners actually make
In rough order of how much they cost:
- Buying on a tip from WhatsApp or a Telegram group, without checking anything.
- Putting everything into one stock because it has been rising.
- Chasing a stock that has already doubled, then panic-selling when it dips.
- Confusing a cheap share price with a cheap company — see market cap.
- Trading illiquid small caps, then discovering there's no buyer when you want out.
If someone is urgently pushing you into a specific stock, that is the signal — just not the one they intend.
What you can do here
Now that the concepts make sense, here's what's actually on the site:
- Stock pages — price history, technicals, financials, dividends, announcements and peers for every listed company.
- Calendars — upcoming board meetings, AGMs, book closures, dividends and rights issues.
- Watchlist — track the stocks you care about (free account).
- Portfolio — record what you own and see real profit and loss.
- Downloads — the underlying data as CSV.
StockPulse is a research tool, not a broker and not advice — you can't buy or sell here, signals and AI summaries are generated automatically and can be wrong, and anything important should be checked against the company's own filing.
You're done — where to go next
That's the quick start. You now know more than most people who open a brokerage account.
When you hit a term you don't recognise, the glossary defines it in one line. When you want real depth on a topic, the guides go further — how PSX trading works, dividend investing, corporate actions, Shariah screening and more.
You can replay this tutorial any time from the Learn page.
General information only, not investment advice. Back to Learn
Welcome — your quick start to the stock market
This is a quick start for complete beginners to the Pakistan Stock Exchange. No jargon assumed, nothing to buy, and it takes about ten minutes.
By the end you'll know what a share actually is, how buying and selling works on PSX, how to read the numbers on this site, and the mistakes that cost beginners the most money.
You can leave any time — your place is saved, and you can replay this from the Learn page.