Getting Started
Advanced Investing
Knowledge is power...
Getting Started
Advanced Investing
Frequently Asked Question
Getting Started

Most people perceive trading in shares as a very easy means of making money. However history has demonstrated that the same is as far from the truth as is the Earth from the Sun.

In case you want stocks to really work for you, you should spend some of your precious time exploring this section to maximize the returns on your valuable money.

Buying a stock is like owning a company. Puzzled? Learn the basics of learning to invest in stock market.

  • Investment Basics
  • Understanding Equities
  • Valuing Investment
  • Picking Up Stocks
Azee learning center
Advanced Investing

Common mistakes an investor should avoid.

  • Panic Selling: In your investment tenure, an investor will come through a phase where the stock prices will go down for a while; this may cause panic and the split second decision people generally take is to sell out your holdings. You should not panic in trouble times and do as this could be detrimental to your portfolio valuation where you could be waiting for long to buy the stock again at lower prices when you discover that your selling out was baseless or just out of fears spreading from rumors. The key to successful investing is to stay invested and buy value stocks at their dips.
  • Never Selling: There are times when your stocks are performing well and have the potential of giving you high returns but you still want to hold on to them in good belief that there are better days to come and earn you can earn more than this opportunity. Make your decision to sell your stock based on the fact of how good is the scope for more price hike. Also, you need to consider that this might be your chance to make profits rather than just holding on to the stock.
  • Investing in Cheap Stocks:We often come across situations where there is lot of volatility in a cheap stock and giving many people opportunity to make profits out of the rapid price movements. Before investing in such stocks, you need to consider the fundamental reason supporting such price movement. Investing in cheap stocks can be risky because there can be situations where you can be the last person to enter in that stock buying spree but you are stuck with that stock later as they have started to tumble down and are usually not potentially strong stocks.

Kind of stocks one should pick to invest.

There are certain criteria’s that act as a base for any stock investment decision such as the targeted time frame for staying invested, kind of stocks one wishes to buy, intention behind buying a stock etc. Ideally if you are looking to invest for long term, you should go for stocks that are fundamentally strong, have good performance record, good management and potentially strong plans for future earnings.

But if you are looking to invest in stocks just to make money in short term, you can buy buzzing stocks that are performing good, have good market recognition and have their technician’s in place and are considered as good stock pick by most of the investors.

Don’t get married to stocks in your portfolio.

In order to take advantage of the price movements, you need to track the valuation of your investments and take necessary action to earn profits out of it.

Investing in equity is all about striking at the right opportunity. If you get attached to the stocks in your portfolio and don't sell them off at the right time, you are just going to keep them in your portfolio for ever and make no profits out of it.

Entry and exit timing.

Whenever you take a decision of investing in to a stock, try to analyze the life cycle of the stock’s performance and judge it against your entry timing into buying the stock. If a stock is at its lifetime high and still performing, you should probably not invest in the same at this time as it has already reached the peak of its performance life cycle after which there are few chances that it will continues to perform good in near future.

If you have invested in stock that as achieved its life time highs and has started to show the sign of coming down from the peak, you should probably exit from the position in such stock as it may keep coming down to unfavorable levels for your portfolio. Hence, it is very important that you analyze the time of entry and exit into any stock investment.

Equity Investment is a short term investment plan.

If you have invested in stock that as achieved its life time highs and has started to show the sign of coming down from the peak, you should probably exit from the position in such stock as it may keep coming down to unfavorable levels for your portfolio. Hence, it is very important that you analyze the time of entry and exit into any stock investment.

There is sure shot possibility of making losses in Equity Investment.

As always maintained, equity investment is as risky as it is rewarding for its investors. You don't make profits or losses in equity investment all the time. As everything else in life, it has its good and bad times which affect your investments but it is not true that equity investment is a sure shot way to make losses.

If you have invested wisely and with caution, you are less likely make any losses than somebody who has invested in an ad hoc manner.

Equity is not a good option for investment.

Because of the ever changing behavior of the stock markets, most people consider equity investment as an unsafe option as compared to other investments which give you fixed income returns and carry less risk. However, if observed closely equity investments give you the best returns in good times & these are generally higher than what other fixed income investments can give you. Hence, you can see that equity is a good option for investment if you want more returns on your investments than just a fixed amount of return.


We believe that every trader passes through three stages:

  • Every trader loses initially:

    We strongly believe that every investor who comes for trading initially gives losses as he/she is unable to have control over his greed and fear. At times with all the information and luck in his favor, he makes profit, and then because of his new over confidence, trades more which results in his profit gone and also sometimes a portion of his capital gone, This cycle of fear of the losses and greed to earn more makes him initially give losses.

  • The trader begins to make no profit no loss:

    Out of the total investors who enter the first stage, 80% of them finish off at the first stage only and after a year or two find that the stock market is not their cup of tea. So in the 2nd stage only the 20% investors try to break even in their trading and quite a lot of them are able to have control over their fear and greed with a result that they stop giving losses. Now these traders are ready for the 3rd stage.

  • The trader starts to make profits:

    This stage where a trader makes consistent profit i.e. he does not give loss cheque to the broker. In fact this is the stage which everyone wishes to have in the stock market. But we strongly believe that anybody who wishes to come to the 3rd Stage has to pass through the above 2 stages.

azee Book

These are some of the trading rules which are universally valid for stock trading.

  • Always use stop loss orders.( Here you should know your loss you can give in a situation where the trade starts going against you.)
  • Never risk more than 10% of your trading capital in a single trade.
  • Never do overtrading.
  • Never let a profit run into a loss.
  • Don't enter a trade if you are unsure of the trend.
  • When in doubt, get out, and don't get in when in doubt.
  • Only trade active markets.
  • Distribute your risks equally among different markets.
  • Never limit your orders. Trade at the markets.
  • Extra monies from successful trades should be placed in a separate account.
  • Never trade to scalp a profit.
  • Never average a loss.
  • Never get out of the market because you have lost patience, or get in because you are anxiously waiting.
  • Avoid taking small profits and large losses.
  • Never cancel a stop loss after you have placed it.
  • Avoid getting in and out of the market too soon.
  • Be willing to make money from both sides of the market.
  • Never buy or sell just because the price is low or high.
  • Never hedge a losing position.
  • Never change your position without a good reason.
  • Avoid trading after long periods of success or failure.
  • Don't try to guess tops or bottoms.
  • Don't follow a blind man's advice.
  • Avoid getting in wrong and out wrong; or getting in right and out wrong. This is making a double mistake.
Frequently Asked Questions

How can I open an equity A/C with AZEE SECURITIES?

A client can open an account with AZEE SECURITIES by duly signing an account opening form, furnishing the necessary documents and signing the client broker agreement as explained on the site.

Do I need separate equity account for margin trading and delivery of securities?

No, every client will have one account wherein all his transactions of buy and sell of securities, whether for delivery or not, will be recorded. All his profits, losses, purchase cost and sale proceeds, margin debits and/or credits, receipts /payments etc. will also be recorded in the same account for transactions.

What is the minimum amount required for opening an account?

Your minimum initial deposit is based on the account type you have selected and may be modified by the Head of Equity Sales. Generally, Rs 100,000/= is required to open an individual Equity Account.

Do I have to maintain a minimum balance in my account at all times?

No, once the account is opened, you may withdraw your all credit balance. However to re-activate the account, you are required to deposit the minimum balance amount.

Are there any fees to maintain AZEE SECURITIES account?

No, there are no charges to maintain AZEE SECURITIES account.

What is the fastest way to open an account?

No, there are no charges to maintain AZEE SECURITIES account. What is the fastest way to open an account? You can download account opening from our website & fax to us.

How can I deposit money at AZEE SECURITIES to activate my account?

You can deposit cross check, pay order, demand draft in favor of AZEE SECURITIES Pvt Ltd. at any branch of AZEE SECURITIES. The credit for the funds will be given only on realization of the check/pay order/draft.

Can I deposit cash at AZEE SECURITIES ?

No. AZEE SECURITIES receives only cross cheques, pay order, demand draft in favor of AZEE SECURITIES Pvt Ltd.

I have other questions regarding commission structure, custodial services, etc. What should I do?

Simply call AZEE SECURITIES Equity Trading department or AZEE SECURITIES help-line at +9221-111-293-293, during office hours. 9.00 a.m. to 6.00 pm. We can help you with these or any other issues you may have.

How do I purchase a stock?

In order to purchase a stock, you can place orders either through verbal instructions in person or over the phone. The instructions can also be transmitted via fax or e-mail to the broker. The information required in order to place a purchase order is the name of the stock to be bought, the purchase price limit and quantity desired.

How do I sell a stock?

Prior to selling a stock, an investor must ensure that the stock is available & ready for sale (RFS). RFS means the stock must be in the investor's CDC account or in case of physical settlement, the shares must be in a saleable state. The transfer deeds accompanying the shares must be duly verified. In dealing with the broker, the same process is to be followed as for purchasing a stock.

What proof do I have that I have traded in a stock through a broker?

Once the trade is executed, your account officer will send a trade confirmation either thru fax or courier to you. This trade confirmation will serve as your proof of investment or sale. Such a trade confirmation slip includes the details of the date of trade, settlement date, name of the stock traded, price at which the trade was executed and the rupee amount, & the commission rate charged by AZEE SECURITIES.

What is T+2 settlement system?

Since September 03, 2001, the stock exchange has adopted the T+3 settlement system & in 2008 T + 2 system was introduced. Any purchase or sale is settled on the trade date plus two working days. For example, a purchase on Wednesday will settle on Monday the next week. In the case of such a purchase, the buyer should expect to receive the shares in his CDC account and pay the broker by cheque. In the case of a sale, he should expect to be able to deliver the shares to the broker on or before the third day and receive a cheque from the broker.

How can I find out what stocks I hold in my portfolio?

You will receive a portfolio statement from AZEE SECURITIES at the end of each month. Moreover, you can ask for a portfolio statement from your account officer at any time free of cost.

How can I do margin trading?

Every client, subject to his trading limits, can buy or sell permit shares on any of the designated exchanges. Every client will have nil purchase or sale position before the cut off time barring the cases where there may be circuit breakers and there may be no buyer or seller, as the case may be, in the market to be able to square off the position.

What is my trading margin limits?

Your trading margin limit is assigned by your Account officer, which may change from time to time, keeping in view the volatility in the market.

Is there any Margin Call?

Due to adverse market movement the margin placed by the client may not support open positions. Generally, AZEE SECURITIES would give intimation of "cut off" if 75% of the margins get eroded. The client would need to fulfill the margin calls or square off the position.

What should I do if my trading margin falls below the assigned limit?

The client would need to reduce trading position or deposit additional margin to fulfill the shortfall of trading margin. Every time trading limit is varied, or the margins are inadequate, the client will be asked to do either of the following before the cutoff time:

Reduce the position within the trading limit and/or remit adequate funds to the designated bank account of AZEE SECURITIES .

In the event of the client failing to take requested Designated Action and his trading position continuing to exceed his limits and/or margins being less than required, AZEE SECURITIES WILL UNDERTAKE SQUARE-OFF OPERATION AFTER CUTOFF TIME without further intimation to the client.

On completion of the SQUARE-OFF process, the gains/losses arising out of the transactions will be credited/debited to his account. His trading limits will be adjusted according to the square-off transactions and new account balances.

How AZEE SECURITIES will pay my credit amount?

AZEE SECURITIES will remit the funds to clients in the following method:

All delivery sale proceeds will be automatically credited to the account of client maintained with AZEE SECURITIES . And the same will be available for his margining requirements and trading limits.

The client can request AZEE SECURITIES to remit funds out of the clear credit balance to their account. AZEE SECURITIES would remit requested amount to his bank account, subject to his margin and limits being in order and subject to deduction of any sums due from him to AZEE SECURITIES . All such request for payments will be met by keeping the exchange payout date in to account.

AZEE SECURITIES will remit funds to client by issuing cross check in favor of clients or using Electronic Fund Transfer facility, or demand draft/pay order, which ever is the most efficient and cost effective at the sole discretion of AZEE SECURITIES.

azee trade FAQs

How many types of companies are operating in Pakistan?

The following types of companies are operating in Pakistan.

  1. Proprietorship Concerns
  2. Partnership Concerns
  3. Private Limited Companies
  4. Public Limited Companies Non listed public limited List public limited
  5. Trusts
  6. Foundations

What SECP stands for?

SECP stands for Securities and Exchange Commission of Pakistan.

What is the role of SECP in Pakistan?

SECP is a regulatory authority that administers the company law and regulator Non-Banking Financial Institutions (NBFIs) like Developed Financial Institutions (DFIs).

Leasing companies, Modarabas (Islamic Financial institutions) etc. it reviews periodically the activities of the companies whether they are functioning as per companies ordinance 1984. It salsa regulates the securities market as well as the capital market.

What does the State Bank of Pakistan do & what is its role?

State Bank of Pakistan is the central Bank of Pakistan and is responsible for the issuance of currency within the country, administering monetary policy (including open market operations), and holding deposits representing the reserves of other banks i.e.

Statutory liquidity requirement (SLR) and engages in transactions designed to facilitate the conduct of business and protecting public interest.

What is money market and capital market?

Usually money market is that market where seller and buyer of money or near money exist, and this market pertains to the transaction for maximum period of one year.

What is a debt security?

They are those securities issued by Corporate against which they raise funds. It is the liability of the firm to repay the face value of the security, plus the interest on or before the maturity of the particular security. Since it is an interest-bearing instrument, it is recorded as a debt of the issuing company.

What is TFC?

It is type of corporate bond and a debt security. Which can be issued by corporate in Pakistan under Companies Ordinance 1984? Under this ordinance it’s redeemable. Capital and can be traded in the secondary capital market.

Why are TFCs issued? And who can issue TFCs?

Those corporate that want to raise funds directly from institutional investors, as well as the general public. Issue TFCs. Private Limited Companies can issue TFCs for a private placement i.e. raise funds from institutional investors, whereas all listed companies can issue TFCs to raise funds, by private placement as well as public offering.

What is meant by bond & perpetual bond?

Bond is an instrument that gives a fixed predetermined amount. After a given period of time. Bond is normally issued for a specific period of time i.e. their maturity period is decided. Those bonds that do not have any maturity period or issued forever, are called perpetual bond. Bonds can be issued both by Corporate and Government. The Government of Pakistan have issued bonds like Pakistan investment Bonds (PIBs). Treasury bills and bonds under National Saving Schemes (NSS). Corporate issue bonds in the form of term finance certificate.

How many types of debt securities are there in the capital market?

The following types of debt securities (bonds) are afloat in the capital market of Pakistan

  • Government issued securities
  • Pakistan investment bonds (PIBs)
  • Federal Investment Bonds (FIBs)

I has been discontinued by the government and replaced by PIBs,

  • Treasury Bills
  • National Saving Schemes (NSS)
  • Defense Saving certificate (DSCs)
  • Regular income certificates (RIC)
  • Special Saving Certificates (SSCs)
  • Corporate bonds
  • Term finance certificates issued by vanes companies

What is the role of a stockbroker in trading?

The stockbroker is an intermediary between a buyer and a seller of stock and gets a commission on each buying or selling transaction. The broker has to be a member of the stock exchange.

What does the term “Bhata” imply in the Stock Market of Pakistan?

It is the terminology used in the capital market of Pakistan for a short-selling i.e. you don’t have Scripps but you sell them at a higher rate and purchase the same scripts in the same quaintly at a lower rate, before the settlement date and vice versa.

What are the criteria for an investment in the capital market?

An intelligent investor should consider the opportunity cost of their funds before taking any decision. After this one should focus on the following in order to make an investment. For investment in fixed income securities one should examine the tenure, the interest rate the credit rating and the history of the company issuing the security. For equity investment one should look at the dividend paying history repute of the management and trend of the stock price.

What are Present Value of money (PV) Future Value of money (FV) and Net Present Value (NPV)?

Present value of money means the value of money today or discounted value of money if invested at a specific rate for a specified time period future value of money means the value of money in the further when invested at a specific rate for a specified time period. Net Present Value is the difference between the sum the present values of cash inflows and sum of the present values of cash outflows.

What is an IRR (Internal Rate of Return)?

The interest rate at which discounted cash flows result in the NPV becoming zero.

What does a discount rate mean?

The rate at which the central bank (State Bank of Pakistan) lends to financial institutions when there is no liquidity in the market.

How would I come to know that my stockbroker is doing the right trading for me?

One each executed transaction your broker should send you a confirmation contract. You can check the rate mentioned in the same contract through Newspapers of Daily Quotation published by Stock Exchange.

What is meant by Yield To Maturity (YTM) of a bond? And how is it calculated?

The yield to maturity of a bond means the IRR the gives the interest rate to the investor if they hold it till maturity. If an investor purchases the bond at par value from the primary market. And holds it till its maturity then the YTM of the bond would be equal to its coupon rate.

One can easily determine the YTM by applying the following formula, when the bond is giving a fixed coupon rate:

YTM = (( C=(FV-MV) / N) / ((FV+MV)/2))

C is the coupon payment
FV is the face value of the par value of the instrument
MV is the current market price or the market price
N is life of the bond

If the bond is not giving the fixed coupon rate then find the IRR of the cash flows of the remaining period. Which will give the YTM i.e. IRR = TYM.

  1. Coupon Rate: Annual payout as a percentage of the bond's par value.
  2. Current Yield: Annual payout as a percentage of the current market price you'll actually pay
  3. Yield to Maturity (YTM): Yield to maturity is the discount rate that equates present value of all the cash inflows to the cost price of the government security or bond. This is actually the Internal Rate of Return (IRR) of the government security or bond.

What is a Bid price?

The price at which a dealer is willing to purchase a security.

What is an Offer Price?

The price at which a dealer is willing to sell a security.

What is a bullish market?

It's a word to describe the investors' attitude. Bullish means optimistic & a bullish market is one where there is an upward trend, a rising market.

What is a bearish market?

Opposite to bullish market - A bearish market is one where there is a downward trend and the sellers outnumber the buyers.

What is meant by being long?

A bull position or description of a holder of a particular stock or share.

What is meant by being short?

Anyone who has sold securities she does not own, in anticipation of buying them later at a lower cost.

What is capital gain?

The amount by which the sale price of a share exceeds the purchase price.

What is averaging?

The practice of buying more of the same shares on a fall, or selling on a rise, in the hope of gaining advantage by the fluctuations.

What is Day Order?

A buy or Sell order expiring at the close of last session...the same day.

What is a Limit Order?

An order specifying a price at which an investor is willing to buy or sell a security.

What is Market Order?

A buy or Sell order to be executed immediately at current market prices.

What is Net Asset Value (NAV)?

The amount by which the assets of a company exceed all liabilities, including loan and preference capital, divided by the number of outstanding shares in issue.

What is hedging?

The practice of offsetting risks against one another, in an attempt to fend off market fluctuations.

What is an odd lot or a broken amount?

An odd amount, such as 59 shares, which is not a normal market quantity is called odd lot. Normal market quantities are usually 500 or 100 shares.

What is par value?

A share is at par value when it is quoted or sold at its face value.

What is a premium?

A security stands at a premium when the price is more than its paid-up or par value.

What is over the counter market?

An informal network of brokers & dealers who negotiate sales of securities (not a formal exchange).

What is a Forward Contract?

An agreement calling for future delivery of an asset at an agreed upon price.

What is an IPO?

An IPO is an Initial Public Offering. This is the process by which a company lists itself on the exchange. A specified percentage of the company's shares are offered to the general public at par value. In some cases, a premium is added to the par value (usually Rs10.00).

When does "badla" take place?

CFS trades take place every day under the T+2 settlement system.

What are the types of "badla" in the market?

There are essentially two types:

  • When a party needs funds to finance a purchase transaction or requires a particular stock for delivery in a clearing.
  • When a party has the funds to lend to take advantage of high interest rates prevailing in the equities markets or has stocks to lend to benefit from reverse Badla rates. The latter is security lending.

What is meant by the terms "daily volume and daily turnover"?

Daily volume is the total number of shares traded at the exchange during the trading day. Daily turnover is the total rupee value of shares traded at the exchange during the trading day.

What is "commission"?

This is the direct cost of executing a trade through a broker. It differs depending upon the value of the scrip and the type of client.

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