Stock market knowledgebase
Plain-English explanations of stock market terms across three markets. 51 articles covering indices, trading, corporate actions, analysis ratios, and the institutions behind each exchange.
PakistanPSX / KSE-100
KSE-100, T+2 settlement, dividends, bonus and right shares, EPS, P/E, ROE, circuit breakers, CDC, NCCPL and more.
Market basics
Blue-chip stockA blue-chip is a large, well-established, financially sound company with a track record of stable earnings and, often, regular dividends.Bull and bear marketA bull market is a sustained period of rising prices and optimism; a bear market is a prolonged decline of roughly 20% or more amid pessimism.Face valueFace value (par value) is the nominal value of a share set in a company's accounts — most PSX shares have a face value of Rs 10 — distinct from the market price.Free floatFree float is the portion of a company's shares available for public trading, excluding locked-in holdings by sponsors, directors, and governments.KSE-100 IndexThe KSE-100 is the Pakistan Stock Exchange's benchmark index, tracking 100 of the largest companies by free-float market capitalisation.Market capitalizationMarket capitalisation is the total market value of a company's shares, calculated as share price multiplied by the number of shares outstanding.Pakistan Stock Exchange (PSX)The PSX is Pakistan's national stock exchange, formed in 2016 by merging the Karachi, Lahore, and Islamabad exchanges, where listed shares are bought and sold.Trading volumeTrading volume is the number of shares traded in a stock or the whole market over a period, used to gauge liquidity and the strength of price moves.
Trading & orders
Bid-ask spreadThe bid-ask spread is the gap between the highest price buyers will pay (bid) and the lowest price sellers will accept (ask).Circuit breakerA circuit breaker caps how far a stock's price can move in a single day, locking it at an upper or lower limit to curb extreme volatility.Margin Trading System (MTS)MTS is a regulated PSX facility that lets investors borrow funds to buy shares, using the shares as collateral and amplifying both gains and losses.Market order vs limit orderA market order executes immediately at the best available price; a limit order executes only at your specified price or better, but may not fill.Short sellingShort selling is selling borrowed shares in the hope of buying them back later at a lower price, profiting if the price falls.T+2 settlementT+2 settlement means a trade is finally settled two business days after the trade date, when shares and cash actually change ownership.
Corporate actions
Bonus sharesBonus shares are additional free shares given to existing shareholders from a company's reserves, in proportion to their current holding.Book closureBook closure is the cut-off date a company uses to finalise its register of shareholders, determining who is entitled to a dividend or other corporate action.DividendA dividend is a share of a company's profits paid out to shareholders, usually in cash and often quoted as a percentage of the share's face value.Dividend yieldDividend yield is the annual dividend per share divided by the share price, showing the cash income a stock pays relative to its cost.Payout ratioThe payout ratio is the share of a company's earnings paid out as dividends, indicating how sustainable the dividend is and how much profit is retained.Right sharesA rights issue offers existing shareholders the chance to buy new shares, usually at a discount, in proportion to their current holding.Stock splitA stock split divides each existing share into more shares by reducing the face value, lowering the price per share without changing the company's total value.
Analysis & ratios
BetaBeta measures how much a stock tends to move relative to the overall market — a beta above 1 is more volatile than the index, below 1 less so.Book value (breakup value)Book value is a company's net assets (assets minus liabilities) per share, representing the accounting value of each share.Earnings per share (EPS)EPS is a company's net profit divided by its number of shares, showing how much profit is attributable to each share.Fundamental analysisFundamental analysis values a stock by studying the underlying business — earnings, assets, growth, and management — to judge its intrinsic worth.Price-to-earnings (P/E) ratioThe P/E ratio is the share price divided by earnings per share, showing how much investors pay for each rupee of a company's annual profit.Return on equity (ROE)ROE measures how much profit a company generates from shareholders' equity, expressed as net profit divided by equity.Technical analysisTechnical analysis studies past price and volume patterns on charts to forecast future price movements and time trades.
Regulation & infrastructure
Central Depository Company (CDC)The CDC is Pakistan's central securities depository, holding shares in electronic (book-entry) form and recording their ownership and transfer.National Clearing Company (NCCPL)The NCCPL clears and settles trades executed on the PSX, acting as the central counterparty that ensures buyers receive shares and sellers receive payment.SECPThe SECP is Pakistan's corporate and capital-market regulator, responsible for overseeing the stock exchange, listed companies, and investor protection.
United KingdomLSE / FTSE
FTSE 100, FTSE 250, AIM, RNS, stamp duty, T+1 settlement, free float, market circuit breakers and more.
Market basics
AIM (Alternative Investment Market)AIM is the London Stock Exchange's market for smaller and growth-stage companies, operating under lighter rules than the Main Market with Nomad-supervised governance.Free Float (UK)Free float is the proportion of a company's shares available for public trading, excluding stakes held by founders, governments, and other strategic holders — used to determine LSE index weightings.FTSE 100The FTSE 100 is the London Stock Exchange's flagship index, tracking the 100 largest companies by market capitalisation listed on the LSE.FTSE 250The FTSE 250 tracks the 101st to 350th largest LSE-listed companies and is considered a better gauge of the UK domestic economy than the globally-oriented FTSE 100.London Stock Exchange (LSE)The London Stock Exchange is one of the world's oldest and largest equity exchanges, operating the Main Market and AIM and hosting companies from over 100 countries.
Trading & orders
Stamp Duty Reserve Tax (SDRT)Stamp Duty Reserve Tax (SDRT) is a 0.5% tax levied on purchases of UK equities settled electronically, charged to the buyer at the point of settlement.T+1 Settlement (UK)T+1 settlement means a UK share trade must be fully settled (ownership transferred and payment made) one business day after the trade date.
Regulation & infrastructure
RNS (Regulatory News Service)RNS is the London Stock Exchange's Regulatory News Service, the channel through which listed companies must disclose price-sensitive information to the market.UK Market Circuit BreakersLSE circuit breakers automatically pause trading in a stock or across the market when prices move beyond defined thresholds, protecting against disorderly markets and erroneous trades.
United StatesNYSE / Nasdaq
S&P 500, NYSE, Nasdaq, SEC, 10-K filings, EPS, market cap tiers, T+1 settlement, Regulation FD, circuit breakers and more.
Market basics
NasdaqNasdaq is the second-largest US stock exchange and the preferred listing venue for technology companies, operating a fully electronic market and home to major indices including the Nasdaq Composite and Nasdaq-100.New York Stock Exchange (NYSE)The NYSE is the world's largest stock exchange by market capitalisation, listing thousands of companies and operating a hybrid floor-and-electronic trading model in lower Manhattan.S&P 500The S&P 500 is the most widely followed US equity index, tracking 500 large-cap stocks across all major sectors and representing roughly 80% of total US market capitalisation.
Analysis & ratios
Earnings Per Share (EPS)EPS measures a US company's net profit divided by its diluted share count, and is the primary metric against which Wall Street analyst consensus estimates are benchmarked each quarter.Market Capitalisation (US)Market cap is the total dollar value of all outstanding shares and is used in the US to classify companies as mega, large, mid, small, or micro cap, determining index membership and institutional investor focus.
Regulation & infrastructure
10-K (Annual Report)A 10-K is the comprehensive annual report filed with the SEC by every US public company, covering audited financial statements, business description, risk factors, and management's discussion of results.Regulation FD (Fair Disclosure)Regulation FD prohibits US public companies from selectively disclosing material non-public information to analysts or investors without simultaneously making it available to the general public.SEC (Securities and Exchange Commission)The SEC is the primary federal regulator of US securities markets, overseeing exchanges, brokers, investment advisers, and public companies, and enforcing laws against insider trading and fraud.US Market Circuit BreakersUS market-wide circuit breakers halt all exchange trading for 15 minutes when the S&P 500 drops 7% or 13% in a day, and close trading early if a 20% decline is reached, to prevent panic-driven disorderly markets.