With all the digitization around the globe and emerging online opportunities in financial markets where commodities ,metals and stocks can be sold or bought easily in just a single click of buttons, Trading and investing has now become a convenient concept. Given, a lot of available platforms such as many friendly apps and website where you are only a click away, You can start Your Trading Journey .
Moreover, trading online only requires a good internet connection and few gadgets along with timely access to the stocks, trading recommendations/advice and current situation of your portfolio (Profit,Loss,Investments,etc). On the other hand, in offline trading a brokers service is required along with phone calls, texts ,visits and meetings further more a lot of assistance in respect of view and ideas are available for timely decision making . In short, future holds a lot of potential for the online platforms to offer maximixe opportunity to trade in Pakistan Stock Exchange with your ease and comfort and by getting timely updates about your account positions.
Although, many people think trading online in stocks is manageable as heard by now and then, only with the help of basic theory. In reality, It requires a lot of in-depth knowledge of stocks, investments, trading, research and understanding about overall market.
TO OPEN AN ACCOUNT IN PSX
Pakistan Stock Exchange (PSX)- after the three major stock markets of Islamabad, Lahore and Karachi merger in January 2016, has become country’s largest and single stock exchange and every account holder needs to open an account in PSX via registered broker in order to start investing in Pakistani market.
WHAT YOU NEED TO KNOW IN BEGINNING?
In order to open an account in PSX you need to have an account with a broker, there are many brokerage houses in Pakistan. Also, there are certain criteria, for a Pakistani national, residing in Pakistan. One needs to have:
- 1 Funded Pakistani bank account
- 2 Identification documents
But if one is not Pakistani or not residing here but wish to open an account here at any brokerage firm the certain criteria is to be met
NRF or NRP
NRF or Non Residential Foreign nationals or NRP Nonresidential Pakistani nationals can open account with help of FII, Foreign Institutional Investors with some special requirements or with custodian account, a depositary account to hold Central Depository Company and the State Bank of Pakistan to hold securities and government bonds.
WHAT IS A CUSTUDION ACCOUNT
- It’s actually a merge of two accounts :
- Special convertible rupee account to hold cash at bank
- Linked securities accounts to hold stocks you purchase.
Yet another account must be opened at a custodian bank for you to be issued a unique market identifier (UIN) number, which identifies you in the market. NRFs, NRPs and FIIs must open all these accounts at custodian banks before they can open an account with a Pakistani stockbroker, in addition to providing identification, bank information, etc.
FACTORS TO BE CONSIDERED BEFORE SELECTING A BROKERAGE HOUSE
If you are ready to choose a broker to start online trading following factors are must be kept in consideration
1 INVESTMENT AND PRODUCT CLASS
It’s best to consider an account that has wide range of choices available to offer, including trading in exchange of mutual funds,
2 LINKAGE ACCOUNTS
With an online trading account, the link to your saving with the brokerage house account is best so that one can easily access to the outside account
3 SERVICE CHARGES
Comparison of best service charges amongst the borage house is better to get the best deal, to avoid the hurdles at later stage.
4 CHOOSE AT YOUR CONVENIENCE
There are many brokerage houses offering better mobile apps, websites, services or an office at your nearby place, it’s better to choose the best convenient offer and facility
Check out the market reputation about their goodwill in market, public reviews and their experiences, partners or their achievements.
6 REGULATION AND EXCHANGE MEMEBERSIP
Almost all financial sectors holding account must be registered and regulated with PSCEP.
All the brokers are required to register with TRADING RIGHTS ENTITLEMENT (TREC) in order to trade at Pakistan Stock Exchange
Also in order to provide clients with frequent updates, technical analysis tools, price charts or indicators plot form or accessible software should be provided.
7 CUSTOMER SERVICES
Easily approachable via phone calls, emails or WhatsApp in case of any query or questions. A proper system should be there to answer customers in case of any hurdle or issue, instants helps and good communication by them. However online trading is easy and convenient but it’s always better to research and approach a right decision so that your money can work better and more efficiently.
Although investing online is easier and convenient but you should have financial knowledge and stock experience previously. Hence you can always opt for a financial advisor or a robo advisor who would help you in decision making of your finances with best financial advice!
Writer: Ayesha Motiwala