FREQUENTLY ASKED QUESTIONS (FAQs)

We reproduce some of the questions, which are repeated asked by clients. These Q&As may help you understand the working of the stock market. If you too have any question in your mind please send us your query immediately.

1. I have found your site very useful; I am a housewife and would like to know whether I can open an account with you?

2. How much do I need to open an account?

3. I have physical shares of PTC can I sell them immediately?

4. Sir, the concept of Carry Over ( Badla ) is not clear to me kindly explain as briefly as possible?

5. I have down loaded your Standardized Account Opening Form (SAOF) and gone through the Terms & Conditions. I would like to know how much margin will you retain and what is the purpose of retaining this margin?

6. I have seen a great deal of hype about online trading. Do you provide any such service, if yes what is the difference?

7. I want to invest in the stock market but my friends tell me to beware. They say the Stock market is nothing more than a gambling den. What do you have to say about this?

8. Stock Exchange is a closed club. What can one do if a dispute arises with the broker, is there any official redressal mechanism?

1-
Thank you for your appreciation it is feed back from people like you, which encourages us to constantly improve our site. Yes you can open an account with us in fact any individual, joint account holder, firm or corporate entity can open and maintain an account with us.

2-
The minimum requirement for opening an account with us is Rs 25,000/- or share deposit of equivalent value.

3-
Most shares have now become electronic i.e the physical shares have to be sent to the Central Depository Company (CDC) where the shares are converted to electronic entries. Once the shares are available in your sub-account with the broker they can be sold immediately. It is recommended that you convert all your physical shares to CDC for ease of transaction in future.

4-
Carry Over Trading (COT) or Badla as it is locally known is a financing mechanism. It simply means that the traders who want to carry forward their trades to the next day can do so through the COT trade. The COT market provides an opportunity for those with surplus funds to invest in a relatively safer avenue and get reasonable returns. Please note that the rate of return is not fixed and varies every day. However you can have an overall idea of the COT rates by visiting this site.

5-
We normally maintain a margin of 30%. The margin acts as an early warning signal for the client and he becomes aware that he needs to reduce his position in order to avoid further losses. Once the position goes below the prescribed margin we alert the client so that he can either increase his deposit or reduces his position.

6-
Yes there is a great deal of media hype about online trading this is part of marketing strategy by some brokers. The fact is that the actual terminals of Lahore Stock Exchange (G) Ltd., are available for remote trading by clients. Your orders directly reach the serv ers of LSE and are not routed through 3^rd party soft wares. In addition to the Remote Trading terminals clients can trade through the web too. For more details Go to Online Trading on this site.

7-
Your friends have given you sound advice when they tell you to beware of the stock market. However they are not entirely correct that the stock market is a gambling den. It is true that people who have little or no knowledge of the stock market trade in a reckless and unplanned manner, which results in huge losses or gains. It would certainly seem like winning or loosing at a casino to them. If you however plan to be an investor, make calculated choices and have well thought out strategy you are likely to get good returns on your investment.

8-
You are right there is a general misconception amongst general public that the Stock Exchanges in Pakistan are run like closed clubs. However let me emphasize here that his misconception is not based on reality. After the reforms carried out by SECP the Exchanges in Pakistan are being run by professional managements and the brokers/members do not and can not interfere in the running of the Exchanges. The over all policy matters are looked after by the Board of Directors. The Board consists of a healthy mix of members and SECP nominated directors. The managing director who is an employee of the Exchange is member of the Board by dint of his office.