The big picture
An order is an instruction with conditions, not a promise that a trade has occurred. KITS is one trading interface associated with PSX; brokers can provide other systems and different enabled features. This topic explains principles that transfer between interfaces while requiring you to check your broker’s current instructions. All prices and quantities in the worked example are invented teaching assumptions, not live quotes or a recommendation to trade.
Core concepts
Learning objectives
- Check the essential fields before submitting an order.
- Explain bid, offer, spread and market depth.
- Compare limit, market and market-to-limit mechanics.
- Reconcile partial fills, cancellation states and contract notes.
1. Prepare the terminal and the instruction
1.1 Platform access and permissions
Begin with your broker’s current platform guide and an authorised login route. Screen names, available order types, depth levels and validity choices depend on the platform, product and permissions. KITS is not the only system used in Pakistan. Practise with a demonstration environment or a written order ticket before using live money, and protect passwords, device access and one-time codes.
1.2 Essential order fields
Read the account, market, symbol, buy-or-sell direction, quantity, order type, price and validity as one instruction. Check available cash or deliverable holdings and the broker’s treatment of estimated charges. A correct company name in research does not protect you from choosing the wrong symbol or account in the terminal. An order preview is the final opportunity to catch these errors before transmission.
Step-by-step method
- Confirm the official platform and correct account.
- Enter and independently reread all order fields.
- Check funds or available holdings, charges and validity.
A learner intends to sell 100 shares but the ticket retains the previous buy direction. Reading the complete instruction aloud before submission catches a potentially opposite transaction.
2. Understand the order book and liquidity
2.1 Bids, offers and priority
The best bid is the highest displayed buying price and the best offer is the lowest displayed selling price. Their difference is the spread. In a continuous order book, compatible orders execute under the applicable matching rules, including price and time priority where specified. A competitive price does not ensure immediate completion if no matching interest remains or other orders have priority.
2.2 Depth and changing availability
Market depth displays quantities at selected price levels. The number of visible levels varies by interface and entitlement; do not assume every screen always shows five. Displayed orders can change or be cancelled before your instruction reaches the market. Thin depth can make an order consume several prices. A narrow spread alone does not prove that sufficient quantity exists for a large transaction.
Step-by-step method
- Identify the best bid, offer and their quantities.
- Inspect additional levels and compare your intended size.
- Treat the snapshot as provisional rather than guaranteed liquidity.
A screen shows an offer for only 20 shares at an attractive price. A proposed 1,000-share purchase is much larger than that level, so the first displayed offer cannot establish the whole transaction’s cost.
3. Choose controls with their trade-offs
3.1 Limit order boundaries
A buy limit sets the maximum acceptable execution price; a sell limit sets the minimum. Execution may occur at a better price when available. The limit controls price but does not guarantee a fill, timing or full quantity. An unfilled remainder can remain open according to validity and market rules. A price change or cancellation request can also affect priority or race with a fill.
3.2 Market and market-to-limit behaviour
A market instruction seeks execution against available interest under applicable exchange and broker protections; it does not guarantee a particular price or unlimited execution. Market-to-limit is a distinct mechanism: under PSX definitions, an unfilled remainder after initial execution can become a limit order at the relevant execution price. Confirm the exact enabled type, session rules, price protections and remainder handling in current documentation rather than interpreting a button from its label alone.
Step-by-step method
- State whether price certainty or immediate participation matters more.
- Read the enabled order type and remainder rules.
- Set valid conditions and accept that execution can remain incomplete.
A buyer will pay no more than PKR 50. A PKR 50 limit expresses that boundary, but if all available sellers ask PKR 50.20 the order can remain unfilled. Raising the limit changes the economic decision; it is not a technical necessity.
4. Calculate a hypothetical execution
4.1 A two-level offer book
Assume a static teaching book offers 100 shares at PKR 50 and 200 at PKR 50.20, with no competing changes, restrictions or fees. A 150-share purchase that is permitted to consume both levels takes 100 at PKR 50 and 50 at PKR 50.20. Gross consideration is 5,000 + 2,510 = PKR 7,510; the quantity-weighted average is 7,510 ÷ 150 = approximately PKR 50.0667.
4.2 Weighted average and remaining quantity
Against a PKR 50 reference, the extra gross cost is PKR 10, not 150 times the entire 20-paisa second-level difference. A PKR 50 buy limit could take at most the first 100 shares from this assumed snapshot; its remaining 50 would need compatible future interest. Actual results depend on matching priority, changing liquidity and platform rules. Fees, taxes and settlement charges must be added separately using the current tariff.
Step-by-step method
- Multiply each fill quantity by its actual price.
- Sum consideration and divide by total executed shares.
- Reconcile the remainder and add applicable charges separately.
The learner compares a PKR 7,500 reference budget with PKR 7,510 gross executed consideration. This demonstrates slippage without pretending that the displayed book will remain unchanged in live trading.
5. Follow the order life cycle and reconcile
5.1 Acknowledgement, fills and cancellation
After submission, distinguish pending transmission, exchange acceptance, open quantity, partial fills, completed fills, rejection and cancellation states. A cancellation request is not a cancellation confirmation; an order may execute before the cancellation reaches it. Similarly, a connection error does not prove that the first submission failed. Repeatedly clicking submit can create unintended duplicate instructions.
5.2 From execution to settlement
Use the unique order reference and trade log to establish the actual state, then contact the broker’s authorised support channel if it remains unclear. Match executed quantities and prices to the contract note, charges and cash or custody records. Settlement completes obligations after execution; eligible PSX transactions moved to T+1 on 9 February 2026, subject to the applicable market calendar and product rules. Never interpret order acceptance or a screen balance alone as proof of completed settlement.
Step-by-step method
- Record the order reference and inspect confirmed fills.
- Check final cancellation status before entering a replacement.
- Reconcile the contract note and completed cash and securities records.
A connection drops after a 150-share order. The learner finds a confirmed 100-share fill and 50 open shares in the order log. Confirming cancellation of that remainder prevents accidentally replacing the entire 150 shares and exceeding the intended purchase.
Control the complete order life cycle
- Verify account and order fields
- Submit once and save reference
- Inspect accepted, open and filled quantities
- Confirm cancellation or final execution
- Reconcile note and completed settlement
Reference table
| Component | Quantity | Price PKR | Gross PKR |
|---|---|---|---|
| First offer fill | 100 | 50.00 | 5,000 |
| Second offer fill | 50 | 50.20 | 2,510 |
| Total execution | 150 | Weighted average 50.0667 | 7,510 |
| Reference budget | 150 | 50.00 | 7,500 |
| Difference from reference | — | — | 10 |
Glossary of key terms
- Bid
- A displayed buying price and associated interest.
- Fill
- An executed quantity under an order.
- Limit order
- An order with a maximum buy or minimum sell price.
- Market depth
- Displayed buying and selling quantities at price levels.
- Market-to-limit
- An order mechanism whose unfilled remainder can become a limit order under specified rules.
- Slippage
- The difference between a reference price and actual execution prices.
- Spread
- Best offer minus best bid.
- Validity
- The conditions governing how long an order remains active.
Frequently asked questions
Does a limit order guarantee execution?
No. It sets a price boundary; compatible liquidity and priority still determine fills.
Does an accepted order mean I own settled shares?
No. Acceptance, execution and settlement are separate stages.
Can I assume a failed connection means no order exists?
No. Check the order reference and confirmed state before resubmitting.
Are all order types available in every KITS or broker account?
No. Check your current platform, account permissions, product and broker instructions.
Common pitfalls
| Common mistake | A better approach |
|---|---|
| Buying the entire quantity at the last displayed price in your estimate | Calculate the effect of depth and changing offers. |
| Treating a cancel request as final | Wait for confirmed status and inspect intervening fills. |
| Submitting again after an uncertain connection | Reconcile the first instruction before creating another. |
| Ignoring charges and settlement obligations | Check the current tariff, contract note and due-date obligations. |
Your learner task
Using paper only, write a complete 150-share buy ticket against the hypothetical book. Compare a PKR 50 limit with an instruction permitted to consume both levels. Calculate each fill, gross consideration and remainder, then describe the response to a dropped connection and a pending cancellation.
Sources & verification
Use the linked documents to check the factual and regulatory context. Source dates and limitations are stated where relevant. Educational examples and analytical frameworks are not personalised recommendations.
- JISPL · Knowledge curriculum ↗
Course identity and subject coverage; factual corrections are explained in this expanded lesson.
- PSX · Investor Awareness Guide ↗
Account agreements, investor responsibilities, records and intermediary verification.
- PSX KITS ↗
Platform reference; confirm broker-specific current features.
- PSX Rulebook ↗
Current definitions and trading rules govern order behaviour.
- PSX T+1 implementation ↗
Eligible transactions transitioned on 9 February 2026; check product and calendar.
Editorial review: 22 October 2026