Margin Trading Facility (MTF) is like a ‘buy now, pay later’ option for stocks. You put in half the money and your broker lends you the rest. It is perfect when you want to buy stocks worth Rs.1,00,000 but only have Rs. 25,000 available.

How MTF works

Think of it as getting a loan to buy stocks, but much simpler. You can purchase shares immediately and pay the borrowed amount later when you sell or convert to delivery (by paying the outstanding).

Want to buy shares worth ₹1,00,000? Pay ₹50,000 upfront and MTF covers the remaining ₹50,000.

Benefits

• Increased buying power - Double your investment capacity with available funds
• Payment flexibility - No immediate full payment required
• Quick opportunities - Act fast on good stocks without missing out
• Better diversification - Spread investments across more stocks

What you need to know

Eligible stocks - All CNX200-listed companies are available for MTF trading. The complete stock list is accessible through the MTF file link.

Charges involved-

Daily interest on borrowed amount until repayment Standard brokerage fees on trades Additional processing and regulatory charges

Remember these important points-

Interest accumulates daily on borrowed funds You can convert MTF positions to delivery by paying outstanding amounts Never invest more than you can afford to lose Have a clear strategy before using borrowed money

Getting started

Setting up MTF is paperless, quick and fully digital. It usually can be set up within minutes. Once activated, you can immediately start using it for eligible stock purchases.

By availing MTF, you take advantage of market opportunities even with limited cash. However, exercising caution while using is utmost warranted.