Margin Trading Facility (MTF) allows investors to trade in stocks using borrowed funds from the broker by paying only a part of the total value (margin) upfront. It’s like buying stocks on credit, using your holdings or cash as collateral.
You can buy shares worth more than the money you currently have by paying only a percentage (margin) of the total cost.
MTF allows you to trade with a larger amount, the gains from a rising stock can be multiplied.
You don’t need to transfer or arrange full capital before making a trade. Brokers provide immediate funding against your margin.
You can repay the borrowed amount in MTF within 365+ days, making it a flexible option for traders & investors.
By borrowing funds, you can invest in multiple stocks or sectors, thereby diversifying your risk.
What is MTF?
Margin Trading Fund (MTF) is a facility offered by stockbrokers that allows investors to buy stocks by paying only a part of the total value, while the remaining amount is funded by the broker. It enables investors to leverage their capital and take larger positions in the stock market than they could with their own funds alone.