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Calculate Your Maximised Returns using
Margin
Trading Facility (MTF)
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| Total Funds Required |
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In the capital intensive world of trading, leveraging tools like the MTF Calculator can significantly enhance the investment decisions and boost potential returns.
Margin Trading Facility (MTF) allows you to borrow money from stock brokers to increase your buying power to purchase more stocks than what you could with just your own funds. On FYERS, you could use MTF facility for 900 stocks.
MTF helps in taking advantage of opportunities despite a shortage of funds. To understand potential returns, you can use the Margin Trading Facility (MTF) Calculator. Let’s dive into the details of calculating returns, using the FYERS MTF Calculator, and the benefits MTF offers to traders like you.
A MTF Calculator, or Margin Trading Facility Calculator, shows how much you can borrow to trade stocks and the margin you need. It helps you see your buying power with the funds you have.
Using FYERS MTF Calculator, you can estimate your potential returns with margin trading. To use the calculator, follow these steps:
Once you're on the MTF Calculator tab enter the preferred 'Stock Name' and 'Stock Price' (the current market price should auto-fill).
Input amount of funds in 'Your Fund' and investment duration in 'Tenure' (in number of days).
Specify the return percentage that you are expecting on that particular stock in the 'Expected Return' field.
The calculator will then display the stock's leverage and the amount of funding provided by FYERS. It will also show the MTF interest rate, the interest amount to be paid, and the total funds required for the transaction. Additionally, the expected returns with MTF will be displayed.
Suppose Rahul has ₹1,00,000 and wants to invest in NIFTYBEES on FYERS, Rahul can get a 4x leverage, which means he gets an additional ₹3,00,000 for his investment. The total investment available at his end would now be ₹4,00,000.
If the ETF rises by 10% over 30 days, the profit on this total investment would be ₹40,000. After ₹4,438.36 in MTF charges for 30 days on a ₹3,00,000 loan at 18% annual interest, Rahul will take home ₹35,561.64.
On the contrary, if Rahul used only his own funds, the profit would have been only ₹10,000.
Increased Buying Power: MTF allows you to buy more stocks than you could with just your own funds, potentially increasing your market exposure and opportunities for profit.
Boosts Returns: By leveraging borrowed funds, you can enhance your returns if your investments perform well.
Flexibility: MTF provides the flexibility to take advantage of market opportunities more quickly. You can act on short-term opportunities without having to wait to accumulate additional capital.
Potential for Short-term Gains: Leveraging funds can be beneficial for short-term trading strategies where quick, significant gains are possible. MTF can help you capitalize on these opportunities.
Efficient Use of Capital: By borrowing funds, you can keep more of your own capital available for other investments, rather than tying it up in a single trade.
However, it's important to note that while MTF offers these benefits, it also comes with risks, including the potential for increased losses and margin calls.
MTF enhances your buying power and market exposure, offering the potential for higher returns while maintaining capital flexibility. With the FYERS MTF Calculator, you can evaluate the financial impact of margin trading, enabling you to make well-informed decisions while optimizing your investment strategy.
To calculate MTF charges, multiply the borrowed amount by the annual interest rate, then adjust for the number of days and divide by 365.
Eg: For a borrowed amount of ₹3,00,000 at an 18% annual interest rate for 30 days, the MTF charge would be approximately ₹4,438.36
Formula: Borrowed Amount * Interest Rate * Number of Days/365
= ₹3,00,000 * 18% * 30 / 365
= ₹4,438.36
FYERS charges 0.0493% interest per day for MTF, which amounts to 18% annually.
MTF trading can be profitable, as it allows you to amplify your returns by using borrowed funds. However, it carries risks like any investment.
Please contact the FYERS support team, if you're looking to convert your MTF position to delivery. But an MTF position cannot be converted into an intraday position.
At FYERS, traders using MTF can access up to ₹10 lakh in exposure.
MTF cannot be used for intraday trading; it is designed for equity delivery and longer-term investments.
You can now use MTF trading for 900 stocks of NSE available through FYERS.
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