Order Types on PSX Explained — Market, Limit & Stop-Loss

When you buy or sell a share, you place an order. There are three kinds you'll actually use. Here's each one, with numbers.

Market Order

"Buy or sell now, at the best price available." You choose how many shares, not the price.

Example: KEL is at Rs 5. You order 100 shares at market. It fills instantly — say 60 shares at Rs 5.00 and 40 at Rs 5.02.

The part that confuses everyone: "not enough balance"

You have Rs 500. A stock is priced at Rs 249. You try to buy 2 shares — that's Rs 498, so you should be fine. But the order gets rejected.

Here's why. When you buy at market, the exchange doesn't block your money at the Rs 249 you see. It blocks it at the upper cap — the highest price the stock is allowed to reach today (say Rs 273):

Sending the cap price does NOT mean you pay it. You still fill near Rs 249 — the cap is just a safety check so you can cover the worst case. To get around it: buy 1 share, add a little money, or use a limit order (below), which blocks only your exact price.

Limit Order

"Only buy at my price or lower" — or when selling, "only sell at my price or higher." You set the price; the trade happens only if the market reaches it.

Example: KEL is at Rs 5, but you only want it at Rs 4.50. You place a limit buy at Rs 4.50. It fills only if KEL drops to Rs 4.50 or below. If it never does, you simply don't buy — no harm.

A bonus: a limit order blocks money at your price (Rs 4.50), not the cap — so it won't get rejected like the example above.

Stop-Loss Order

A conditional order — mostly used to limit a loss. On PSX you set two prices:

• Trigger price — the level that switches the order on.
• Buy/sell price — the price the order is actually placed at once it's switched on.

You set the sell price a little below the trigger, so it still fills while the price is falling.

Sell side (limit a loss): You bought KEL at Rs 5 and don't want to lose too much. You set a trigger at Rs 4.50 and a sell price at Rs 4.45. Nothing happens while KEL stays above Rs 4.50. The moment it touches Rs 4.50, a sell order at Rs 4.45 goes out — so you're out before the loss grows.

Buy side (enter on the way up): You'll only buy KEL if it breaks past Rs 5.50. You set a trigger at Rs 5.50 and a buy price at Rs 5.55 — a touch above the trigger, so it still fills while the price is rising. Nothing happens while KEL stays below Rs 5.50. The moment it touches Rs 5.50, a buy order at Rs 5.55 goes out.

So the rule is simple: for a sell, the order price sits a little below the trigger; for a buy, it sits a little above.

On PSX, stop orders are usually handled by your broker's app, not the exchange. Ask your broker how theirs works.

When You Sell: FIFO Decides Your Tax

When you sell, NCCPL (which collects your tax) works out your Capital Gains Tax using FIFO — First In, First Out. Your oldest shares are counted as sold first, no matter which ones you think you're selling.

Example — you own KEL:

• Buy 100 shares at Rs 4
• Later buy 10 more at Rs 5
• Then sell 10 at Rs 6

You'd think you sold the newer Rs 5 shares — a Rs 1 profit each. But FIFO counts them from your first batch at Rs 4:

So you're taxed on Rs 20, not the Rs 10 you expected. You can't pick which shares to sell — the oldest always go first.

CGT is deducted automatically when you sell. The rate depends on your filer status and changes every year's budget. Sell at a loss, and there's no CGT on that sale.

Quick Recap

Two things to remember: the cap price you see is just a ceiling, not what you pay, and when you sell, your oldest shares go first for tax.

Want to check a stock before you buy? Screen every PSX company, or see exactly what each trade costs you.