When you open an MTF position, you’re actually taking a loan from your broker to buy shares. Like any other loan, the agreement here is that you will pay interest on the borrowed amount and maintain the required margin. But there’s also a time limit.

With Upstox, you can place your MTF position on hold for a maximum of 365 days. On day 366, if you haven’t done anything, your broker will automatically square off the position. This rule means you get:

• Daily interest: Interest is charged for every day until you sell, convert, or the broker squares off.

• Corporate actions: Dividends, splits, or bonuses are passed on to you, but depend on you clearing the borrowed part at the end.

• Risk controls: If the value of pledged collateral drops, your broker may call for extra e-margin in Upstox or square off even before day 365.

Can My Positions Be Auto-Squared Off Before 365 Days?

Yes. Even though the official holding window is 365 days, there are cases where your MTF position can be closed earlier:

• Margin Call: If the stock price falls and you don’t add funds when asked, your broker may square off your position.

• Big Value Drop: If your position loses more than half its value, some brokers may sell it immediately to reduce risk.

• Stock Eligibility Change: If SEBI or the broker removes the stock from the approved MTF list or a corporate action affects it (like a split), your position may need to be closed.

• Collateral Impact: If the pledged shares you used as margin lose value or are removed, it can also trigger a square-off.

What does ‘Square Off’ in this 365-day slot mean?

Squaring off simply means the broker sells the stock in your account. Whether you’re sitting on a gain or a loss, the shares will be sold in the market, and the outcome (profit or loss) will be realised right then.

So if you’ve been riding a stock hoping it will recover or climb higher, waiting past the one-year mark won’t give you that chance. The decision is taken out of your hands.

What You Can Do Before Day 365 Nears?

Before your MTF hits the 365-day mark, you don’t have to sit and wait for your position to be squared off. Instead, try to:

1. Exit the position yourself: Sell your stock at any point before the 365th day. This way, you’re in control of when and how much you book as profit or loss.

2. Convert the position to Demat holdings: If you believe in the stock long-term, you can convert it into normal Demat holdings. To do this, you must repay the borrowed amount and interest, after which the shares are fully yours.

Manage Your MTF Positions With Upstox

The 365-day cap exists because MTF is intended for short- to medium-term use, not long-term financing. To ensure responsible usage, Upstox enforces this rule while still allowing traders ample flexibility to manage their positions.

Since MTF positions attract daily interest, holding too long can reduce overall gains. Even before reaching the tenure limit, it is wise to evaluate whether the expected returns justify the ongoing charges. Upstox makes this process simple with transparent rules, clear tenure tracking, and convenient conversion options.