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How to use the PSE Board Lot table

July 15, 2013 / Stock Trading / 1 Comment

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How much money do you need to start trading stocks in the Philippines? What is the minimum number of PLDT, East West Bank or Megaworld shares that you can buy or sell? What is the next price increment for a stock currently trading at P2,890?

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Do you know that questions like these can be answered simply by looking at what is called the PSE Board Lot Table? What is the PSE Board Lot Table? The Board Lot table of the Philippine Stock Exchange (PSE) is a guide for stock investors that shows the minimum number of shares that can be bought or sold at any given time and the minimum price increments of each PSE-traded stock. Here is the PSE Board Lot table. PSE Board Lot Table Minimum Fluctuations (Tick Size) 0.0001 0.0010 0.0010 0.0050 0.010 0.010 0.02 0.05 0.05 0.10 0.20 0.50 1.00 2.00 5.00

Stock Price A B C D E F G H I J K L M N O 0.0001 - 0.0099 0.0100 - 0.0490 0.0500 - 0.2490 0.2500 - 0.4950 0.50 - 4.99 5.00 - 9.99 10.00 - 19.98 20.00 - 49.95 50.00 - 99.95 100.00 - 199.00 200.00 - 499.80 500.00 - 999.50 1,000 - 1,999 2,000 - 4,998 5,000 - up

Board Lot (Lot Size) 1,000,000 100,000 10,000 10,000 1,000 100 100 100 10 10 10 10 5 5 5

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This table governs Normal Lot trades in the PSE. The Normal Lot market is slightly different from the Odd Lot market, which we will discuss in a separate article. Dont worry for now. If you are just trading normally, you only need to understand the PSE Board Lot table. Using the Board Lot Table As mentioned earlier, the PSE Board Lot Table can be used to determine: (a) the minimum number of shares that can be traded for each stock; (b) the minimum price fluctuation or increment applicable to each stock; and (c) the minimum amount of money needed to buy any PSE-traded stock. Lets see some examples of the application of the Board Lot table. Minimum Number of Shares that can be Traded A. To know the minimum number of shares that can be bought or sold for each stock, follow these steps. Step 1: Get the current price of the stock. Lets say you want to know the minimum number of shares of PLDT (stock code: TEL) that you can buy or sell. Check the PSE website or your brokers website to get TELs current price. Lets say you checked and saw that its currently being traded at P2,890. Step 2: Check the row in the PSE Board Lot table corresponding to that stock price. TELs stock price of P2,890 corresponds to Row N in the Board Lot table. This is because the price of P2,890 is within the range P2,000 to P4,998. Step 3: In that row, determine the Board Lot (Lot Size) for the stock. The lot size represents the minimum number of shares that can be traded for any stock. In the case of PLDT, the lot size is 5 meaning, a minimum of 5 shares of PLDT can be bought or sold at any time. Remember, this is minimum. Of course, the trades can be higher than 5 shares and all posted trades may be processed as long as the number of PLDT shares being traded is divisible by 5. Easy, right? Lets move on to the next application of the Board Lot table.

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Minimum Price Increment or Fluctuation B. Lets say you want to sell your shares of East West Bank (stock code: EW). It currently trades at P29.60. Can you sell it at P29.68? How about at P29.97? Can you sell it at P30.00? Here are the steps needed to know the price increment or fluctuation for any give PSE-traded stock. As you can see, this is useful if you want to input your own buying or selling price for a stock. Step 1: Get the current price of the stock. Just like in Example A above, you can check the PSE website or your brokers website to get the current price of your stock. In the case of EW, we have seen that its price is P29.60. Step 2: Check the row in the PSE Board Lot table corresponding to that stock price. If EWs stock price is P29.60, what row in the Board Lot table corresponds to this price? If you answered Row H, you are correct. The P29.60 price is within the price range in that row, which is P20.00 to P49.95, so we will use this row in Step 3. Step 3: Determine the Minimum Fluctuations (Tick Size) for that stock. The Tick Size column represents the minimum price change or increment for any given stock. Given the price of EW, the relevant row is Row H which shows that EWs tick size is PHP 0.05. This means prices to be used when trading EW must be in increments of or divisible by 0.05. So, can you sell EW at P29.68? Since its not divisible by 0.05, this cannot be possible. Can you sell EW at P29.97? Again, since this is in increments of 0.05, this price will not be accepted. Can you sell EW at P30.00? A big yes! Since this price is divisible by 0.05, EW can be sold at this price! However, whether the sale will be a done trade will, of course, depend on the presence of buyers willing to purchase EW shares at that price. Minimum Amount of Investment Needed to Buy Stocks C. Now, a very useful application of the Board Lot table is in determining the minimum amount of money needed to start trading stocks. Actually in the PSE, there is no minimum fixed amount of money needed to start trading stocks; it depends on the price of the stock and the minimum lot size. Lets see an example below. Lets say we want to know how much we need to buy the minimum number of shares of Megaworld Corp. (stock code: MEG). Step 1: Get the current price of the stock. Again you can simply check the PSE website or your brokers website to get the current price of your stock. In the case of MEG, lets say its current price is P3.35. Step 2: Determine the lot size of that stock in the PSE Board Lot table. We need to know the minimum amount of MEG shares that can be traded. To do this, refer back to the step-by-step process explained in Example A above. Checking MEG in the Board Lot table, we see that its minimum lot size is 1,000 shares in Row E. Step 3: Multiply the current price with the minimum lot size. The product of the current price and a

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stocks minimum lot size equals the minimum amount of money you need to buy that stock. In the case of MEG, this is P3.35 x 1,000 shares = P3,350. This means you need P3,350 to start buying MEG shares! Oops! Take note that brokers charge certain fees and commissions so this amount will surely increase. Read our article on PSE Stock Trading Fees and Charges to find out what these specific fees and charges are. Also, be informed that some stock brokers require that you fund your trading account a minimum amount of money before you can start trading. This amount is usually higher than the minimum amount of money you need to buy a particular stock. Find out the minimum amount needed to fund your brokers trading account in the article List of Online Stock Brokers in the PSE. Now you know how to use the PSE Board Lot table. Again, be reminded that this table is only applicable to trades using Normal Lots. In our next article, well see an example of trading in the alternative market, the Odd Lot market. If you want to keep updated on this and other tutorials, subscribe to use by leaving your email address in the Subscribe Now button below! Click below to read other useful and interesting articles: Comparison of Online Stock Brokers in the Philippines PSE Stock Trading Fees and Charges Philippine Stocks Performance: 1st Quarter 2013 How to Trade Stocks in the Philippines FREE! Stock Target Prices and Brokers Recommendations

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Topic Summary Keywords: board lot in stocks, board lot minimum of lri stocks, how to read pse

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