What is MTF (Margin Trading Facility)?
What is MTF (Margin Trading Facility)?
Blog Article
MTF, or Margin Trading Facility, is a service offered by brokers that allows investors to buy stocks by paying only a part of the total trade value upfront. The rest is funded by the broker, providing leverage to the investor. This means you can take larger positions in the market with limited capital.
✅ How MTF Works
Suppose you want to buy ₹1,00,000 worth of shares but only have ₹30,000. With MTF, you can use your ₹30,000 as margin and borrow the remaining ₹70,000 from the broker. You can then hold the position for multiple days or weeks, depending on the broker's terms.
Key Benefits
Enhanced buying power
Longer holding period compared to intraday trading
Opportunity to maximize gains during bullish markets
Points to Remember
Interest is charged daily on the borrowed amount
Only approved stocks (MTF stocks) can be bought under this facility
Use an MTF charges calculator to know the cost before entering a trade
Higher risk due to leverage—proper risk management is essential
???? Final Thoughts
MTF is a powerful tool for investors who understand market movements and want to amplify their returns. However, it’s important to choose the right stocks and keep an eye on interest costs to ensure the benefits outweigh the risks.
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