Trading is the act of buying and selling financial assets like stocks, currencies, and commodities to make a profit from price fluctuations. For example, long-term investing, trading often involves shorter-term strategies to capitalized on market movements by buying low and selling high (or selling high and buying low).
Trading Legality in Pakistan — 2025 Update
| Type of Trading | Legal Status in Pakistan | Regulated by | Can You Do It? | Notes |
|---|---|---|---|---|
| Stock Trading (PSX) | ✅ Fully Legal | SECP (Securities & Exchange Commission of Pakistan) | ✅ Yes | 100% legal. You can open a brokerage account, buy/sell shares, and even receive dividends in your bank account. |
| Commodity & Futures (Gold, Oil, etc.) | ✅ Legal | PMEX (Pakistan Mercantile Exchange) | ✅ Yes | Legal for individuals through PMEX-licensed brokers. |
| Forex (Foreign Exchange) | ⚠️ Partially Legal / Risky | No direct SECP regulation for individuals | ⚠️ Allowed only through international brokers, but not officially licensed in Pakistan. | |
| Crypto Trading (Bitcoin, USDT, etc.) | ❌ Not Legal | — | ⚠️ Technically banned by SBP (State Bank of Pakistan) | You can still access platforms like Binance via P2P, but it’s not recognized by law — risk of account freezing if caught. |
1.Legal & Safe Option: PSX (Stock Market Trading)
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100% legal under SECP and PSX.
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You can open an account online at any registered brokerage (AKD, JS Global, Arif Habib, etc.).
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Safe for local banks and taxes.
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Ideal if you want long-term, low-risk investing.
2. Forex Trading — Allowed but Not Regulated
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Not banned for individuals, but SECP doesn’t regulate foreign brokers.
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You can trade using platforms like Exness, XM, OctaFX, IC Markets — but you do it at your own risk.
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Some banks may block deposits/withdrawals to these brokers.
Tip: Always use internationally regulated brokers (FCA, ASIC, CySEC) and never keep large amounts there long-term.
3. Crypto — Currently Prohibited by SBP
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In 2018, the State Bank of Pakistan banned banks and payment systems from dealing in crypto.
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However, many Pakistanis still trade crypto peer-to-peer (P2P) using Binance or OKX.
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If caught by bank filters, your account can be flagged for suspicious activity.
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So trade only with caution, ideally through foreign wallets (not local banks).
4. Tax & Legal Compliance
If you trade legally (PSX or PMEX):
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Declare income to FBR under your NTN (National Tax Number).
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Tax on capital gains: around 12.5%–15% depending on holding period.
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Brokers automatically deduct advance tax on each trade.
In Simple Words
✅ PSX Stocks / PMEX Commodities → Fully legal
⚠️ Forex → Not regulated, do it carefully
❌ Crypto → Not legal, high risk
Investing in the stock market can seem like an overwhelming endeavor, especially for beginners. Yet, with the right knowledge and techniques, the stock market can become one of the most profitable ventures for any individual. For those who want to invest in Pakistan, the Pakistan Stock Exchange (PSX) offers an incredible platform to capitalize on the country’s economic growth. Whether you’re looking for short-term gains or long-term investments, understanding how the PSX works is the first step towards financial success.
As the name suggests, a stock exchange is a regulated marketplace where stocks (or shares of companies) are bought and sold. A stock exchange facilitates the trading of publicly listed companies’ shares. In simpler terms, when you invest in the stock market, you are essentially buying a part of a company, known as shares. As the company grows, so does the value of your shares, and you can sell them for a profit.
