Speak the language of investing

The highest and lowest prices a share has traded at over the past year, a quick gauge of where today's price sits in its range.

FBR's list of people who have filed their income tax returns. Being on it, as a 'filer', gives you lower withholding tax on dividends and lower capital gains tax.

The weighted average price you paid for a holding, including commissions and charges. It is the basis for working out your profit or loss.

How sensitive a stock is to market moves. A beta of 1.2 means it has historically moved about 20% more than the index, and below 1 means less.

The bid is the highest price a buyer is offering, and the ask (or offer) is the lowest price a seller will accept.

A large, established, financially sound company with a long record of earnings and, often, dividends.

Free shares issued to existing shareholders from reserves. A 20% bonus gives 1 new share for every 5 held. The price adjusts, so your total value is unchanged.

An IPO price-discovery process in which eligible investors bid for shares at different prices. The strike price is set from the demand.

The period when a company fixes its register of shareholders to decide who receives a dividend, bonus or right, or who can vote at a general meeting.

Shareholders' equity divided by the number of shares: the accounting net worth behind each share.

A bull market is a sustained period of rising prices and optimism, and a bear market is a sustained decline. A fall of 20% or more from a peak is a common rule of thumb for a bear market.

Compound annual growth rate: the steady yearly rate that would take an investment from its starting value to its ending value.

Tax on profit from selling securities. For listed shares, NCCPL computes and collects it. Rates are set in the annual Federal Budget and are lower for active filers.

Holds listed securities electronically. Investors hold shares in a CDC sub-account through a broker or in a CDC Investor Account they control directly.

Daily upper and lower price limits on each share, plus market-wide halts after extreme index moves, designed to curb panic.

The confirmation your broker issues for every executed trade. It shows the price, quantity, commission and taxes, and is the record to check against your CDC statement.

Whether short-term assets can cover short-term obligations. Below 1 can signal liquidity pressure.

How much a company relies on borrowing compared with shareholders' funds. High leverage magnifies both gains and losses, especially when interest rates rise.

Spreading money across companies and sectors so that no single bad outcome badly damages your whole portfolio.

The cash dividend paid for each share. On PSX it's often announced as a percentage of face value, so 35% on a Rs 10 share is Rs 3.50.

Annual dividends as a percentage of the share price. An unusually high yield can signal a falling price or an unsustainable payout.

Example: Rs 15 of dividends on a Rs 150 share is a 10% yield.

The profit attributable to each ordinary share. It's the starting point for most valuation ratios.

Example: Profit of Rs 2 billion and 100 million shares gives an EPS of Rs 20.

Earnings before interest, taxes, depreciation and amortisation. A rough proxy for operating cash generation that ignores how the business is financed.

The value of the whole business to all capital providers. It adds debt and subtracts cash, so companies with different capital structures can be compared fairly.

Enterprise value divided by EBITDA. Unlike P/E, it isn't distorted by differences in debt levels, so it's useful for capital-intensive sectors.

The first trading day on which a share trades without its announced entitlement. Buy before the ex-date to receive it.

A fund listed on the exchange that tracks an index or a basket of securities and trades like a share during market hours.

The nominal value printed on a share, commonly Rs 10 on PSX. It has no link to the market price, but PSX dividends and bonuses are often quoted as a percentage of it.

Cash left after running and maintaining the business. It is what funds dividends, debt repayment and growth.

The shares readily available to trade, excluding strategic holdings by sponsors, directors, associates or the government. PSX indices weight companies by free-float market cap.

An agreement to buy or sell shares at a fixed price on a future date. PSX offers deliverable and cash-settled futures, and they are leveraged, higher-risk instruments.

The share of revenue left after the direct cost of producing goods or services.

When a company first offers shares to the public and lists on the exchange. PSX IPOs often use book building to discover the price, followed by a retail portion at the strike price.

How many times operating profit covers interest expense. Low coverage means debt costs could squeeze profits.

Interim dividends are declared during the financial year with quarterly or half-yearly results. The final dividend is recommended with annual results and approved at the AGM.

An index of 30 Shariah-compliant companies selected by size and liquidity, used as the benchmark for Islamic equity investing.

PSX's benchmark index of 100 companies, made up of the largest from each sector plus the largest overall, weighted by free-float market capitalisation.

An order to trade only at a specified price or better. You control the price, but the order may not fill.

How easily a share can be bought or sold without moving its price. Low liquidity makes entering and exiting harder.

A regulated facility, run through NCCPL, for buying shares with borrowed money. Leverage increases both potential gains and losses.

The total market value of a company's shares, used to compare company size.

An order to buy or sell immediately at the best available price. It fills quickly, but the price isn't guaranteed.

The average closing price over a set number of sessions, such as 50 or 200 days, used to smooth out noise and show the trend.

Clears and settles exchange trades, issues investors' UINs, runs the MTS facility and computes and collects capital gains tax on listed securities.

The share of each rupee of revenue that ends up as profit after all expenses and tax.

Profit from core operations as a share of revenue, before finance costs and tax.

Pakistan's national stock exchange, formed in January 2016 by integrating the Karachi, Lahore and Islamabad exchanges.

The share of earnings paid out as dividends. Very high payouts leave little for reinvestment or bad years.

Adjusts the P/E for expected earnings growth. Around 1 is often read as fairly priced relative to growth. It is only as reliable as the growth estimate.

Compares the share price with book value per share. Widely used for banks and asset-heavy businesses. Below 1× means the market values the company at less than its net assets.

How many rupees investors pay for each rupee of annual earnings. A lower P/E can mean a cheaper stock, or one the market expects to grow slowly. Compare within the same sector.

Example: A Rs 200 share with EPS of Rs 20 trades at a P/E of 10×.

A stricter version of the current ratio that excludes inventory, which may be hard to turn into cash quickly.

Realised profit or loss is locked in when you sell. Unrealised (paper) profit or loss is the gain or loss on shares you still hold, at today's price.

Periodically trimming holdings that have grown too large and adding to underweight ones, to return to your target allocation.

A Real Estate Investment Trust: a listed vehicle that owns income-producing property and distributes most of its income to unit holders.

A 0–100 momentum indicator, usually calculated over 14 sessions. Readings above 70 are often called overbought and below 30 oversold.

How efficiently a company turns its total assets into profit.

How much profit a company makes on its shareholders' money. Consistently high ROE with modest debt is a sign of a quality business.

New shares offered to existing shareholders in proportion to their holdings, usually at a discount, to raise fresh capital. Not subscribing dilutes your ownership.

The regulator of Pakistan's corporate sector and capital markets, including brokers, listed companies and mutual funds.

The transfer of shares and cash after a trade. PSX's regular market settles on T+1, one business day after the trade date.

The total number of a company's issued shares held by investors. Bonus issues, rights issues and splits change it.

A company that passes Shariah screening on its core business and on financial ratios, such as interest-bearing debt, non-compliant investments and non-compliant income, against set thresholds.

Selling shares you don't own in the hope of buying them back cheaper. On PSX it is only allowed under specific regulations, and naked (blank) short selling is prohibited.

The gap between the bid and the ask. It's narrow in liquid shares and wide in thinly traded ones, which is a hidden cost of trading.

Divides each share into several smaller ones by lowering face value. Share count rises and price falls proportionally, with no change in total value.

A pre-set exit price that limits losses on a position, either as a broker order type or as a personal rule you follow manually.

Support is a price level where buying has tended to stop declines, and resistance is a level where selling has tended to cap rallies.

Your full return including both price change and dividends received. It is the fairest way to compare investments.

A brokerage holding a Trading Right Entitlement Certificate from PSX and a licence from SECP, authorised to trade on the exchange.

An investor identifier registered with NCCPL, usually your CNIC number, which links your trades across brokers.

How much a price swings over time, usually measured as the standard deviation of returns. Higher volatility means higher risk.

The number of shares traded in a period. Price moves on high volume are generally considered more meaningful.

Tax deducted at source by the company before a dividend is paid. Rates are set in the Federal Budget and are higher for people not on the Active Taxpayers List.

Zakat may be deducted at source from dividends for Muslim Pakistani citizens unless a valid exemption declaration (CZ-50) has been filed with the company or CDC.