What is Margin Trading Facility?
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Margin Trading Facility is a service provided by stockbrokers that lets you buy shares by paying only a part of the total value upfront. Your broker funds the remaining amount, which helps you purchase more shares. The part you pay upfront is called the “initial margin”. Your broker charges interest on the borrowed amount, which depends on their policies and borrowing tenure.
It’s important to note that MTF comes with risks, including the possibility of amplified losses, especially in volatile markets. The interest costs on the borrowed amount can also impact net returns. It’s essential to understand these risks and use MTF carefully within your trading strategy.
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How can it benefit me as a trader?
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as a trader, you can increase your buying power, leverage your investment, and have flexibility in your trading strategy. It’s perfect for traders who have a positive short-to-medium term outlook on certain stocks but don’t have sufficient capital to take significant positions. By paying only a fraction of the total trade value, you can use your capital more efficiently and invest in a larger number of shares, giving you the potential for higher returns. Unlike intraday trading, MTF allows you to hold your positions for a longer period, so you’re not forced to sell on a low due to a single day’s market fluctuation. Even when shares are bought under MTF, you’re still eligible for corporate actions like dividends, rights, and bonuses, giving you the best of all worlds. So, whether you’re a seasoned trader or just starting, MTF can help you take advantage of the market’s opportunities and make the most out of your investments.
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Do you have any idea about the interest rate charges? Also, I was curious if it’s possible to use the to buy all stocks or there is any restrictions in it?
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For MTF, I use DHAN. They provide about 0.0438% per day on outstanding MTF and non-maintenance of a 50:50 margin. And no, you cannot purchase all the stock.
@fyers when you will implement the feature. Please come with it faster because it is a much-needed feature.
@111182809663926256117 Feedback noted!
@nikhil_roy you won’t be able to buy all stocks, The eligible stocks will be listed post MTF roll out. The MTF feature will be rolled out next month.
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Next Month of Which Month ? 
@kishore_krishna
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