Stock exchanges can bring great fortune to investors. But, this fortune does not depend upon luck. Rather, it requires a great deal of knowledge about the stock market. So, if you are new to invest in Pakistan Stock Exchange and looking forward to making a profit out of your investment, you are at the right place. This article will guide you about all the basics that you need to know about the stock market.
What is a Stock Exchange?
Stock exchange trades stock. Stock exchanges have shares of companies registered and the investors can buy or sell them anytime they want. This is where a lot of people are making profits. Companies sell their shares through stock exchanges and raise capital from the investment. Stock exchanges provide anonymity to the buyers and sellers, so they can easily make profits.
The short and long term investment
Short-term stock traders buy and sell shares daily and they are called day traders. They analyze day-to-day market situations and take quick actions in buying and selling the shares whenever they think it is profitable.
Long-term investment traders keep their shares for a long time. They trade in the long run and wait for shares to reach their peak so they can sell at much higher prices. They also benefit from dividends from the company.
Criteria for stock trading
For Pakistani nationals, to invest in the Pakistan Stock Exchange, you need to have a brokerage account, national identification documents, and a Pakistani-funded bank account.
For overseas residents, they have to create a Pakistani bank account with custodial services.
Steps to invest in Pakistani Stock Exchange
The most important requirement is the opening of a brokerage account. Then you need to provide the following documents:
- A Pakistani bank account
- Salary slip
You need to have a Trading Right Entitlement Certificate which allows the official trading of stocks.
You must be aware of a trading platform which is mainly an online app where you can analyze market situations, fluctuations in price, and trade accordingly. On a trading platform, you find indicators and charts that help to evaluate the market.