HOW PMEX TRADING WORKS
Commodity futures trading involves more than buying or selling a market. It requires understanding the contract, the price you trade at, the margin required to maintain a position, and the risks associated with changing market conditions.
At Titan Capital, we believe informed participation begins with understanding how the market works, how orders are executed, and how trading positions are managed.
THE MARKETPLACE
Pakistan Mercantile Exchange (PMEX) is Pakistan's commodity futures exchange, operating within the regulatory framework overseen by the Securities and Exchange Commission of Pakistan (SECP).
PMEX provides an electronic marketplace where eligible participants can trade listed futures contracts through authorised brokers. Each contract has defined specifications, which may include the underlying commodity or reference market, contract size, price quotation, trading hours, expiry date, and settlement method.
Rather than purchasing a commodity in the ordinary retail sense, a futures trader enters a contractual position whose value changes as the relevant market price changes.
The outcome of a trade depends on the contract specifications, the entry and exit prices, applicable charges, and the market's movement.
Listed futures contracts traded through the exchange's electronic market.
Standardised specifications define what is being traded and how the contract operates.
An authorised intermediary facilitates client access to the exchange and provides account and trading support.
FROM ACCOUNT TO EXECUTION
A futures trade follows a defined process, from account opening and funding to order execution and position management. Understanding each step helps you make more informed decisions before committing capital.
Before trading, you need an account through a PMEX-authorised broker.
Complete the applicable account-opening forms, provide the required identification and supporting documents, and complete the relevant verification procedures. Read the account terms, broker commission schedule, and risk disclosure documentation before proceeding.
Your account must be approved and ready for trading before you place orders.
Once your account is approved, deposit funds through the applicable PMEX-approved funding process.
Client funds must be deposited using the designated mechanism and account details associated with the client's trading account. Follow the broker's verified instructions and ensure that the payment originates from your registered bank account as required.
Funds deposited into a trading account are used to meet applicable margin requirements and other obligations associated with trading.
Do not represent funds as available for trading until they are reflected and available in the relevant account.
Review the contracts available on PMEX and understand their specifications before choosing one.
Consider:
Different contracts can have substantially different exposure and risk characteristics. A lower margin requirement does not necessarily mean a lower-risk trade.
Explore Available ContractsAfter selecting a contract, assess the market and decide whether you intend to buy or sell.
A buy order generally establishes or increases a long position. A sell order can establish or increase a short position, depending on the existing position and order type.
Submit your order through the designated trading platform, specifying the relevant contract, quantity, order type, and price where applicable.
An order is not necessarily an executed trade. Execution depends on the order conditions and available market liquidity.
Always review the contract and order details before submitting an instruction.
After execution, monitor your open position, account balance, unrealised profit or loss, and applicable margin requirements.
Futures positions are exposed to ongoing price movements. Losses can reduce available equity and may result in additional margin requirements or position restrictions under the applicable rules.
Monitor your account regularly and maintain sufficient funds to meet applicable obligations. Do not assume that a position will automatically close at a preferred price or that a stop-loss order guarantees a specific exit price.
A trader may close an open position by executing an offsetting transaction, subject to the contract's rules and market conditions.
The process at expiry depends on the specific contract. Some contracts are cash-settled, while others may have different settlement or delivery provisions.
Before entering a trade, understand its expiry date, final trading time, settlement mechanism, and any applicable procedures.
The financial result depends on the position, price movement, contract specifications, and applicable charges.
LONG AND SHORT
Futures traders can establish positions based on their expectations of market movement. A position's direction determines how changes in the relevant contract price generally affect its value.
A long position generally benefits when the contract price rises after entry.
Illustrative example
Suppose a trader buys one hypothetical futures contract at 100 and later closes the position at 104.
The price has increased by 4 units. The resulting gain or loss in money depends on the contract's value per price unit, position size, and applicable charges.
If the market instead falls to 96, the same price movement would produce an adverse result for the long position.
A short position generally benefits when the contract price falls after entry.
Illustrative example
Suppose a trader sells one hypothetical futures contract at 100 to open a short position and later buys it back at 96 to close it.
The price has fallen by 4 units. The resulting gain or loss in money depends on the contract's value per price unit, position size, and applicable charges.
If the market instead rises to 104, the same price movement would produce an adverse result for the short position.
These examples use hypothetical prices solely to explain price direction. They are not actual PMEX quotes, forecasts, or representations of expected returns. Actual results depend on the relevant contract specifications and applicable charges.
CAPITAL AND EXPOSURE
Margin is the amount of funds required to support a futures position under the applicable exchange rules. It is not necessarily the purchase price of the underlying commodity or the maximum amount you can lose.
The margin required depends on the contract, position, applicable exchange requirements, and prevailing conditions. PMEX may revise margin requirements, and additional requirements can apply under relevant circumstances.
A relatively small margin requirement can support exposure to a much larger contract value. This creates the possibility of substantial gains relative to the initial margin, but it can also magnify losses relative to the funds committed.
The funds required to establish or support a position under the applicable margin rules.
Applicable rules and account conditions may require additional funds to maintain an open position. Do not assume that a single margin figure remains unchanged.
The amount available to support trading depends on the account's equity, open positions, applicable margins, and other relevant obligations.
Important
Margin is not a measure of the maximum possible loss. A market move against your position can reduce your account equity rapidly and may require additional funds or lead to position liquidation under applicable rules.
FUNDING AND WITHDRAWALS
PMEX's direct-funding framework is designed to separate the handling of client funds from the brokerage's operating funds.
Under the applicable exchange funding arrangements, clients deposit funds through designated channels linked to their trading accounts. Withdrawals are processed according to the relevant exchange procedures, account verification requirements, and applicable rules.
Titan Capital's intended brokerage model is to facilitate client access and provide account and trading support without treating client trading funds as company operating funds. Client deposits must follow the designated PMEX funding process.
The client initiates a deposit using the applicable designated funding instructions.
The funds are allocated to the appropriate trading account under the applicable exchange mechanism.
Available funds support the account's applicable trading obligations. Withdrawal requests are processed through the prescribed process and are subject to verification, available balances, and applicable exchange procedures.
Always verify the beneficiary details, designated funding instructions, and withdrawal process before initiating a transaction. Never transfer funds to an individual's personal account or an unverified third party in connection with your trading account.
KNOW WHAT YOU ARE TRADING
PMEX lists contracts across different market categories. Each contract has its own terms, pricing conventions, trading schedule, margin requirements, and settlement provisions.
Before selecting a contract, make sure you understand what drives its price and how its specifications affect your potential exposure.
Gold, silver, and other listed metal contracts may be influenced by international prices, currency movements, interest rates, economic data, and market sentiment. Learn more about gold futures trading in Pakistan.
Energy contracts may be influenced by supply and demand, inventories, geopolitical developments, production decisions, and changes in global economic activity.
Agricultural contracts may be influenced by weather, crop conditions, inventories, seasonal patterns, and supply-chain developments.
Listed financial-market contracts may reference specified indices or other financial benchmarks. Their price movements can reflect economic data, interest rates, corporate developments, and broader market sentiment.
RISK BEFORE PARTICIPATION
Commodity futures trading involves financial risk and may not be suitable for every individual. Prices can move quickly, and losses can occur even when a trade is based on careful analysis.
Prices can move unexpectedly because of economic data, geopolitical developments, supply and demand, interest rates, currency movements, and other factors.
Where a contract's exposure exceeds the funds committed as margin, adverse price movements can have a disproportionately large effect on account equity.
Orders may execute at a different price from the one expected, may only partially execute, or may not execute at all. Stop orders do not guarantee execution at the specified price.
Different contracts have different expiry dates and settlement mechanisms. Failing to understand these provisions can lead to unexpected obligations or outcomes.
Connectivity issues, incorrect order details, platform interruptions, and delays can affect trading activity. Clients should understand the platform and verify orders and account statements.
Trading under pressure, increasing position sizes after losses, or committing funds without a defined risk plan can result in avoidable mistakes.
Before trading, read the applicable risk disclosure, understand the contract specifications, and consider whether you can afford the financial risk involved. Never assume that past performance or a successful previous trade predicts future results.
COMMON QUESTIONS
PMEX trading refers to trading futures contracts listed on Pakistan Mercantile Exchange. Clients access the market through authorised brokers and trade according to the specifications and rules of the relevant contracts.
You need to open an account through a PMEX-authorised broker and complete the applicable onboarding and verification requirements before trading.
Select an authorised broker, complete the applicable account-opening documentation and identity verification, and follow the account activation process. You must complete any required profile approval before trading.
Funds must be deposited through the applicable PMEX-designated funding mechanism using the verified instructions associated with your trading account. Follow the prescribed process and confirm that the funds are available before trading.
Buying to open a position generally establishes a long position, which benefits from an increase in price. Selling to open a position generally establishes a short position, which benefits from a decrease in price. The treatment of an order also depends on any existing position and the order instructions.
The amount depends on the account type, contract selected, current margin requirements, applicable charges, and the funds you need to manage adverse price movements. There is no single figure that applies to every contract and trading situation.
Review the applicable requirements before opening a position.
No. Margin is the amount required to support a position under applicable rules. It does not necessarily limit the possible loss. Adverse price movements can reduce account equity and may result in additional margin obligations.
An open position may generally be closed by executing an offsetting transaction, subject to the relevant contract rules and market conditions. Understand the expiry and final trading time before entering a position.
No. Settlement depends on the individual contract's specifications. Check whether the contract is cash-settled or has other settlement or delivery provisions before trading.
Withdrawals are subject to the applicable exchange process, account verification, available funds, outstanding obligations, and other relevant requirements. Requests must be submitted using the prescribed process.
No trading outcome or return is guaranteed. Futures prices can move in either direction, and trading involves the risk of financial loss.
Two charges apply to every PMEX trade: Titan Capital broker commission (set by Titan Capital — confirm the current schedule before you trade) and PMEX/NCCPL statutory charges (set by the exchange and regulators, such as the PMEX trading fee of 0.009% of contract value, minimum Rs 30 per side, plus SST). These are separate and are listed in detail on the Fees page.
Confirm broker commissions with Titan Capital. Titan Capital sets its own broker commission schedule per contract, per side. Before you trade, confirm the current commission for your account and contract directly with Titan Capital at +92 304 8421591 or contact@titancapital.pk. Statutory charges are additional to broker commissions and are not set by Titan Capital.
MAKE AN INFORMED START
A sound trading process begins with understanding the contract, the risks, and the obligations attached to every position.
Explore available markets, review the relevant disclosures, and contact Titan Capital if you need information about the account-opening process.
