Glossary · PSX Mechanics
Carry-Over Trades
Equity repurchase transactions used in the stock market to temporarily finance trades by speculators. Known locally as Badla, these transactions allow investors to carry positions forward by financing them short-term. Largely replaced by modern instruments like MTS and MFS on the PSX.
What is Carry-Over Trades?
The definition — and what it means in practice.
Carry-Over Trades, commonly called Badla, are equity repurchase-style transactions used to temporarily finance stock positions. They let a trader “carry” an open position forward by borrowing funds short-term against shares, rather than settling the full cash amount immediately. In effect, the position remains open while financing is rolled over, with the financing provider earning a charge for providing that short-term liquidity.
Carry-over financing matters because it introduces leverage: gains and losses are magnified, and the cost of financing reduces net returns. It also changes risk in fast markets, where price moves can trigger urgent funding needs or forced position reductions. For most retail investors, the key practical point is recognising that “carrying” a position is not free, and that leveraged structures can behave very differently from fully paid, cash-market investing.
If you buy shares but finance them short-term to keep the position open past settlement, you are “carrying” it forward and paying a financing charge on the amount funded.
- Badla is short-term financing that allowed traders to carry equity positions forward instead of fully settling immediately.
- It behaves like leveraged exposure: returns can rise or fall faster than in fully paid trades.
- Financing costs matter; they can turn a small gain into a loss after charges.
- Carry-over funding can increase the chance of forced selling if funding is unavailable or risks rise.
How Carry-Over Trades works on the PSX
The Pakistan-specific rules, conventions, and numbers.
On the Pakistan Stock Exchange (PSX), the old badla/carry-over mechanism has largely been replaced by regulated leverage facilities: the Margin Trading System (MTS) and broker Margin Financing (MFS). For a PSX investor, that means “carrying a position” is typically encountered through these modern margin-style frameworks rather than the legacy badla market practice.
PSX trades clear through the National Clearing Company of Pakistan Limited (NCCPL), and shares are held electronically at the Central Depository Company (CDC). With T+1 settlement, any form of financing that allows a position to remain open effectively bridges the cash requirement around settlement. In practice, retail investors are more likely to see the impact as margin availability, financing charges, and potential margin calls than as a separate badla trade ticket.
Common misconceptions
Where investors most often get this wrong.
Badla is the same as investing with your own cash.
Badla is financing. Because you are using borrowed funds, your profit and loss can move more sharply, and financing charges reduce net returns.
Carry-over trades eliminate settlement obligations.
They do not remove the underlying obligation; they temporarily fund it. The position is kept open by rolling short-term financing rather than paying in full immediately.
Badla is the main way to use leverage on the PSX today.
On the PSX, badla has largely been replaced by regulated systems such as MTS and MFS, which are how leveraged equity exposure is typically provided now.
Using Carry-Over Trades on BSL
Where this term shows up across the platform — with live data.
- Read how regulated leverage works via our Leverage page
- Compare leveraged vs cash-market concepts in the Leverage glossary entry
- Learn the mechanics of margin through Margin
- Understand risk events like Margin Call
Frequently asked questions
What investors ask about Carry-Over Trades on the PSX.
Badla is a carry-over financing arrangement historically used in Pakistan’s equity market to fund stock positions short-term so they could be carried forward. It is essentially a way to maintain a position using financing rather than paying the full cash amount immediately.
Badla has largely been replaced on the Pakistan Stock Exchange by regulated leverage mechanisms such as the Margin Trading System (MTS) and broker Margin Financing (MFS). Investors usually encounter carry-forward financing through these newer structures.
Both aim to provide leverage by funding an equity position. The key difference for PSX investors today is that modern leverage is provided through regulated systems like MTS and MFS, rather than the older badla/carry-over practice.
Yes. Any financing that increases exposure relative to your own cash can magnify gains and losses, and financing charges reduce net returns. If prices move against the position, funding pressure can rise quickly.
T+1 settlement means trades are due to settle one business day after execution. Financing arrangements that carry positions forward effectively bridge cash requirements around settlement, but they also introduce financing costs and leverage-related risks.
Related terms
Keep building the picture.
The use of borrowed funds to increase the size of an investment position. Leverage amplifies both potential gains and potential losses. On the PSX, leverage is available through margin trading and futures.
The amount of capital an investor must deposit with a broker to open or maintain a leveraged position.
A demand from a broker for an investor to deposit additional funds when the value of a margin account falls below the required minimum. Failure to meet a margin call can result in the forced liquidation of positions.
A leveraged trading facility on the PSX that allows investors to take larger positions than their available capital. Positions must be settled within a defined period or rolled over.
A PSX-regulated facility allowing investors to buy shares using financing provided by brokers or financial institutions, with the purchased shares serving as collateral.
The current standard settlement cycle on the PSX, where trades are finalised one business day after the transaction date. The shift from T+2 to T+1 was implemented to reduce counterparty risk and improve market efficiency.
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