is the national stock exchange of the Philippines.

Its main function is to facilitate the buying and selling of

stocks and other securities through its accredited
participants.

The PSE has two trading floors:
PSE Center in Ortigas, Pasig City
PSE Plaza in Ayala, Makati City

Trading Participants trade daily from 9:30 a.m to 12:10
p.m. except Saturdays, Sunday, legal holidays and days
when the Central Bank Clearing Office is closed.



Choose a stockbroker.
The PSE has a complete list of information about all its
trading participants who are authorized and qualified to
trade securities for you. This list is also available on the
PSE's website and the telephone directory's Government
and Business listings yellow pages under the category of
stock and bond brokers. Aside from representing you in
the stock market, a stockbroker can also offer you
services such as access to market reports/studies, on-
time delivery of important documents, and advise on
your investments. It is then important that you trust
your stockbroker and that you are satisfied with its
services.

You shall be required to open an account and fill
out a Customer Account Information Form and to
submit identification papers for verification.
The stockbroker will then assign a trader or agent to
assist you in either buying or selling any listed security.
There are also stockbrokers who have an online trading
facility that allows you to post orders by yourself, but
sufficient understanding of how the stock market works
is key. If you choose to be assisted by a trader or agent,
you can discuss with him/her what stocks you want to
buy or sell.

Give the order to your trader, and then ask for the
confirmation receipt.
Your buy or sell orders are relayed to the stockbroker's
dealer for execution. In an automated system as in PSE,
the order is keyed in through a trading terminal and
automatically matched. Confirmation of done trades -
via phone, email or online - is made as soon as possible
and subsequently, an official confirmation or invoice
should be delivered to you.

Pay before settlement date.
The delivery or payment should be made before the
settlement date of T+3. For traditional stockbrokers,
settlement of transactions is usually done after three (3)
working days from the transaction date. This means that
for transactions done on Monday, as an illustration,
payment should be received by Thursday. Meanwhile for
online stockbrokers, settlement of all transactions is
done on the transaction date. Settlement of accounts is
performed by the clearing house.

You shall receive from your broker either the
proceeds of sale of your stocks (after 3 business
days) or proofs of ownership of stocks you bought
(confirmation receipt and invoice).
If you wish to have a physical certificate of the stocks you
bought, you can give instructions to your broker and pay
the required upliftment fee.

PSE Composite Index (PSEi)
The PSE Composite Index, commonly known
previously as the PHISIX and presently as the PSEi, is
the main stock market index of the PSE.
The PSEi is the most watched index on the PSE and is
also home to most major Philippine companies listed
on the PSE. The PSEi is also the PSE's only broad-base
index. It is also one of the indicators on the general
state of the Philippine economy.

PSE All Shares Index (ALL)
The PSE All Shares Index is the stock index in the
Philippine Stock Exchange in which all of the stocks
traded are included in computations for the level of the
index.

The remaining six indices are sector indices based on a company's main
source of revenue. Although listed in an index, companies are listed on
the PSE under the First Board, Second Board or the Small and Medium
Enterprises Board based on market.

PSE Financials Index (FIN)
The PSE Financials Index, is the main stock market index of the
PSE for banks and financial entities.
This index is one of the PSE indices also home to companies listed on
the PSE composite index, namely Banco de Oro Universal Bank, Bank
of the Philippine Islands and Metrobank.

PSE Mining and Oil Index (M-O)
The PSE Mining and Oil Index is the main stock market index of the
PSE for mining and oil companies.

PSE Holding Firms Index (HDG)
PSE Industrial Index (IND)
PSE Property Index (PRO)
PSE Services Index (SVC)

Market Order
The simplest type of order.
An order to be executed at the best price available in the
market.

DANGER: Adverse price movement may take place
between the time the investor places the order and
the time the order is executed.

Limit Order
Designates a price threshold for execution of the trade.
Buy Limit Order
Stock may be purchased only at the designated price or lower.
Designated price < current market price of the stock.
Sell Limit Order
Stock may be sold at the designated price or higher.
Designated price > current market price of the stock.

DISADVANTAGE: It offers no guarantee it will be
executed at all; the designated price may simply not be
obtainable.

A limit order that is not executable at the time it
reaches the market is recorded in a limit order book.

The limit order is a conditional order: It is executed
only if the limit price or a better price can be obtained.
Stop order the order is not to be executed until the market moves to
a designated price, at which at which time it becomes a market
order.
Buy stop order the order is not to be executed until the
market rises to a designated price, that is, until it trades at or
above, or is bid at or above the designated price.
designated price > current market price of the stock

Sell stop order - the order is not to be executed until the
market falls below a designated price, that is, until it trades at or
below, or is bid at or below the designated price.
designated price < current market price of the stock
DANGERS:
Stock prices sometime exhibit abrupt price changes, so the
direction of a change in a stock price may be quite
temporary, resulting in the premature trading of a stock.

CONDITIONAL ORDERS AND THE DIRECTION OF TRIGGERING SECURITY
PRICE MOVEMENTS
Price of
Security
Limit Order
Market-if-
Touched Order
Stop-Limit
Order
Stop Order

Higher price

Price specified
for a sell limit
order

Price specified
for a sell market-
if-touched order

Price specified
for a limit buy
stop order

Price specified
for a buy stop
order

Current price
Lower price

Price specified
for a buy limit
order

Price specified
for a buy
market-if-
touched order

Price specified
for a sell stop-
limit order

Price specified
for a sell stop
order

Comment

Can be filled
only at price or
better; does not
become a market
order until price
is reached

Becomes market
order when price
is reached

Does not become
a market order
until price is
reached; can be
executed only at
price or better

Becomes market
order when price
is reached.
Stop Order an order designed to get out of an
existing position at an acceptable price (without
specifying the exact price)

Market-if-touched Order an order designed to get
into a position at an acceptable price (also without
specifying the exact price)

Opening Order indicates a trade to be executed
only in the opening range for the day.

Closing Order indicates a trade is to be executed
only within the closing range for the day.

Fill-or-kill Order orders that contain order
cancellation provision. It must be executed as soon as
it reaches the trading floor or it is immediately
canceled.

Open Order or Good until canceled order - good
until the investor specifically terminates the order.

Round lot is typically 100 shares of a stock.

Odd lot defined as less than a round lot.

Block Trade an order of 10,000 shares of a given
stock or a total market value of $200,000

Super Designated Order Turnaround System
(SuperDot) NYSEs system for routing orders of a
specified size (submitted by brokers) through a
computer directly to the specialists posts where the
orders can be executed.

Buying on margin A transaction in which an
investor borrows to buy shares using the shares
themselves as collateral.

Call money rate - or broker loan rate is the interest
rate that banks charge brokers for funds for this
purpose.

Securities of Exchange Act of 1934 prohibits
brokers from lending more than a specified percentage
of the market value of the securities.

Algorithmic Trading the use of computer programs
to enter trading orders to minimize the costs
associated with trading.

TRADING COSTS:
1. Explicit Trading Costs are direct costs of trading, such
as broker commissions, fees, and taxes.

2. Implicit Trading Costs represent such indirect costs
as the price impact of the trade, timing costs, and
opportunity costs.


Custodial fees charged by an institution that
holds securities in safekeeping for an investor.
Transfer fees fees associated with transferring
an asset from one owner to another.

Soft Dollars arrangements under which products or service
other than execution of securities transactions are obtained by
an adviser from or through a broker-dealer in exchange for the
direction by the adviser of client brokerage transactions to the
broker-dealer
-refer to money paid by an investor to a
broker/dealer or a third party through commission revenue
rather than by direct payments.

Impact Costs is the change in market price due to
supply/demand imbalances caused by the presence of the
trade.


Timing Costs is measured as the price change between
the time the parties to the implementation process
assume responsibility for the trade and the time they
complete the responsibility.


Opportunity Costs is the cost of securities not
traded. This cost results from missed or only partially
completed trades.

Institutions typically transact much larger orders than
individuals or retail investors.

Institutions typically pay lower commissions than
individuals.

An individual trading through a broker/dealer typically
goes through a stockbroker. These orders go to a retail
exchange execution desk and from there to the NYSE or to
the OTC execution desk. Institutional investors typically
give their orders directly to the institutional broker/dealer
execution desk, for both exchange and OTC orders.

Block Trades defined as either trades of at least
10,000 shares of a given stock, or trades of shares with
a market value of at least $200,000, whichever is less.

Program Trades involve the buying and/or selling
of a large number of names simultaneously. Such trade
are also called basket trades because effectively a
basket of stock is being traded.