| Transaction Type |
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Regular Transaction
Provisional Transaction
Spot Transaction
Futures Transaction
Carry Over Transaction
Mechanism of Badla
Margin Financing Transaction |
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Regular Transaction
IGI Securities Limited offers regular transactions to its clients through the Karachi and Lahore Stock Exchanges. The client can buy any stock by depositing 100% cash to IGI Securities and can acquire the delivery of the shares in his/her CDC sub account.
In the T+3 settlement systems, the transaction is settled on the third day following the day of the trade. If the client is unable to deposit the net required cash balance by last day of the settlement, his positions are squared automatically. Regular transactions are generally operated through cash accounts in which the amount deposited by the Account Holder is fully used. This means that the Account Holder can only buy/sell shares equal to the funds deposited by him/her with the broker. |
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Provisional Transaction
Provisional Transaction refers to the activity that takes place between the time a scrip is formally listed at the Stock Exchange and after its Initial Public Offering (IPO) has taken place and the subscriptions have been received from the prospective shareholders.
For investors, Provisional Transaction helps gauge the demand and supply situation of the scrip before formal trading starts at the Stock Exchange. The settlement procedure during the provisional trading period is similar to the settlement of Future Contracts.
When the company completes the process of dispatch/credit of allotted shares to subscribers through the CDC, it is officially listed and placed on the T+3 counter. Trading on the provisionally listed counter then comes to an end and all the outstanding transactions are transferred to the T+3 counter with effect from the date of formal listing. Shares listed on the provisional counter can be purchased or sold by all IGI Securities clients. |
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Spot Transaction
Spot Transactions imply delivery upon payment. Normally in Spot Transactions the trade is settled within 24 hours. |
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Futures Transaction
IGI Securities Limited offers the facility of Future Contract Transactions to all its clients. A Future Contract involves purchase and sale of shares at some future date, at a price fixed today. Karachi / Lahore Stock Exchange has initiated one month future contracts for a list of securities, whereby monthly future contracts end on the last Friday of each month and are settled on the following Wednesday. |
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Carry Over Transaction
Badla is a mechanism to carry forward a speculative trade. It is also known as the Carry Over Transaction (COT). Badla Finance in simple terms means putting money on interest. |
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Mechanism of Badla
A person buys shares with the intention to make profits but without blocking money. The purchase at the end of the settlement is carried forward to the next settlement. Here is where the client / Badla financier steps in. The financier blocks the money for taking delivery of shares purchased by the speculators. He gives the money to the exchange for shares bought. For this facility the speculator pays interest to the financier. This interest is known as Badla.
Badla financing is done through stockbrokers; the financier gives money to his broker who in turn, hands over the same to the Exchange. The shares remain under the custody of the Exchange, on behalf of the broker's client. Since the shares and the money lie with the Exchange, broker's risk is also eliminated. |
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Margin Financing Transaction
A Margin Financing Account is an account where an investor only needs to keep a portion i.e. minimum 30% of the funds as a margin of the total amount with the stockbroker to process his/her trades at the Exchange. The remaining 70% of the financing is arranged by the margin financier i.e. Stockbroker to the client for the purpose of margin trading.
To avail margin-financing facility at IGI Securities, all customers are required to sign a Margin Agreement Form with IGI Securities and deposit a minimum of 30% of cash or approved securities to obtain margin-financing facility for the purpose of margin trading in his/her/their account. |
