How to Start Online Trading in Pakistan’s Stock Market Safely and Legally

Islamabad:Online trading has become a popular and accessible avenue for investors, and with Pakistan Stock Exchange (PSX) continuing to grow, many are keen to explore this option. But how can one invest in stocks legally and safely, without the risk of fraud and with minimal investment?

In an exclusive interview with *V News*, stock market expert Shahryar Butt shared valuable insights on how to navigate the process of online trading in Pakistan.

According to Shahryar Butt, investing in the Pakistan Stock Market is easy, and there are over 100 registered brokers in the country. Anyone looking to buy shares can contact any of these brokerage houses, all of which have their online platforms available for users. The list of registered brokers can be found on the official Pakistan Stock Exchange (PSX) website.

### **The Process of Getting Started:**
Shahryar Butt explained that once you visit the PSX website, you can find the details of the brokerage houses and select one to get started. The brokerage firm will ask for basic documentation and, after verifying your information, will help you open a trading account. This process typically takes two days, after which you will have access to a mobile trading app, allowing you to start trading.

### **The Role of the Broker:**
According to Butt, brokers play an essential role in stock trading. They stay in constant contact with investors, providing updates on market trends, fluctuations, and share prices. Brokers will guide you on which shares to buy based on market conditions, but ultimately, the decision to invest remains with the investor. “The broker can advise, but the final choice is always yours,” said Butt.

### **Investor’s Responsibility:**
Shahryar Butt emphasized that while brokers are there to guide investors, it is crucial for investors to conduct their own research before making investment decisions. “Investors should not rely entirely on brokers. They should educate themselves about the stock market and understand trading before buying shares,” he stated.

He further explained that there are currently 650 companies registered on the Pakistan Stock Exchange. Investors should look for companies that have shown consistent performance in recent months. This approach ensures both brokers and investors are well-informed for future investments.

### **Difference Between Crypto and Stock Trading:**
Butt also clarified the difference between crypto trading and stock market trading, particularly in Pakistan. He pointed out that cryptocurrency is currently banned in Pakistan due to issues like lack of tax compliance and rising fraud cases. In contrast, the PSX operates under the oversight of regulatory bodies like the Securities and Exchange Commission of Pakistan (SECP) and the National Clearing Company of Pakistan Limited (NCCPL), ensuring investor protection and minimizing the risks of fraud.

### **Minimum Investment for Stock Trading:**
When asked about the minimum amount needed to start trading, Shahryar Butt explained that investors can buy shares at any price. For example, if a company’s share costs 9 rupees, an investor can buy as little as one share at that price. The price of shares varies depending on the company, with some shares priced as low as 5 rupees, while others may go up to 250 rupees or more.

“Many brokers allow you to start trading with just 5,000 rupees,” said Butt, making it accessible for those looking to invest smaller amounts.

### **Broker Fees:**
As for brokerage fees, Butt clarified that brokers only charge a transaction fee, which is typically minimal. This fee is applied when buying or selling shares. Additionally, there are some taxes levied by the government that investors must pay.

### **Conclusion:**
Shahryar Butt’s advice offers a practical roadmap for individuals interested in starting online trading in Pakistan’s stock market. By selecting a reputable broker, conducting personal research, and starting with a small investment, investors can engage in the stock market safely and profitably. With proper guidance and knowledge, the stock market offers an opportunity for everyone, even with minimal initial capital.