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Margin Trading Facility
Margin Trading Facility (MTF)
Margin Trading Facility (MTF) lets you trade larger deals than your capacity by utilising broker’s funds. Buy more shares and securities by paying up to four times less than the total value and get more leverage on your investments.
How to buy stocks using Margin Trading Facility (MTF)?
A step-by-step guide to avail Margin Trading Facility:
How to open a Demat and Trading account
- Open a Bajaj Broking Demat and Trading account, or log in if you already have one. MTF is pre-activated.
- Search for the stock and check that it is on the approved MTF list.
- Click 'BUY' and select '[MTF]' as the product type.
- Review the margin required, the funded amount and the interest rate that applies.
- Make sure you have enough funds to meet the minimum margin.
- Confirm the order.
- After market hours, CDSL sends you an email and SMS to authorise the pledge of the shares.
- Authorise the pledge before 9 PM on the same trading day. If you do not, [the position may be squared off as per exchange rules].
Benefits of Margin Trading Facility (MTF)
Advantages of opening a Demat Account
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Higher buying power
Take positions up to 4 times your margin on approved stocks. The exact leverage depends on the margin set for each stock.
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Up to Rs. 90 crore per trading account, depending on your available margin and the stocks you buy.
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Dividends and corporate benefits stay with you
Shares bought with MTF are held in your own demat account under pledge, so dividends, bonus shares and splits accrue to you.
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No separate application
MTF is pre-activated on your Bajaj Broking Demat and Trading account, so you do not submit extra documents to use it.
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Regulated facility
MTF is offered by Bajaj Financial Securities Limited, a SEBI-registered stockbroker (Reg. No. INZ000218931), under SEBI's margin trading rules. You authorise every pledge yourself through CDSL.
Please note: Leverage magnifies losses as well as gains. With 4x leverage, a 10% fall in the share price wipes out about 40% of your margin, before interest. Keep extra funds ready to meet margin calls.
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Eligibility and documents required for MTF
MTF is pre-activated on your Bajaj Broking Demat and Trading account, so there is no separate application for MTF. To open the account, keep these ready: PAN card, Aadhaar or other address proof, a cancelled cheque or recent bank statement, your signature and a passport-size photograph.
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Eligibility criteria
- Your account is active, and you have accepted the MTF terms (Rights and Obligations and the Risk Disclosure Document).
- MTF is available only on approved stocks, and the margin differs by stock. Check the MTF stock list before you buy.
- You keep adequate margin for every MTF position until you sell or repay. A shortfall leads to a margin call.
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Margin trading facility interest rate, fees and charges
MTF interest is charged daily, only on the funded amount: Interest = Funded amount × Annual interest rate × Number of days ÷ 365. At 11.74% p.a.*, that is about 0.033% a day, or ₹32.85 a day for every ₹1 lakh funded.
Type of fees | Applicable charges |
Account opening charges | Nil |
Interest rate | 11.99% to 14.99% p.a. |
Subscription charges | Freedom pack - Free for 1st year; Rs. 431 p.a. 2nd year onwards Professional pack - Rs. 2,500 p.a. |
Pledging charges | Rs. 35 (taxes applicable) |
Call and trade charges | Additional Rs. 20 per executed order |
Brokerage on MTF orders | ₹10 per order (Professional Pack); ₹20 per order (Freedom Pack)* |
Frequently asked questions
How does margin trading facility work in India?
Margin Trading Facility (MTF) allows investors to purchase eligible stocks by paying only a portion of the total value, while the broker funds the remaining amount. Investors pay interest on the funded portion and must maintain the required margin as per regulatory guidelines.
What happens in case the minimum margin of an MTF order is not maintained?
A margin shortfall arises, and Bajaj Broking sends a margin call by [SMS, email and app]. You can add funds, pledge approved shares as collateral or sell part of the position by [time and day]. If the shortfall is not met, the shares may be sold (auto square-off), and [the applicable short-margin penalty or square-off charge] applies.
How to check the details of MTF positions?
Inside the Bajaj Broking app, under the Margin Report, you can access a comprehensive report that provides information on Margin Trading Facility positions and their corresponding Margins.
What is the full form of MTF?
MTF stands for Margin Trading Facility, also called margin trade financing or margin trade funding. It is a facility from your stockbroker to buy approved shares by paying only part of the trade value.
What is the maximum leverage in MTF?
Up to 4x, which means you pay as little as 25% of the trade value. Leverage is set stock by stock across 900+ approved stocks*, based on liquidity, volatility and exchange margin rules, so many stocks carry less than 4x.
How is MTF different from intraday trading?
Intraday positions must be closed the same day. With MTF, you can hold the shares for up to 365 days*: Bajaj Broking funds part of the purchase, you pay daily interest on that amount from T+1, and the shares stay pledged until you sell or repay. Unlike a delivery trade, you do not pay the full value upfront.
Which stocks are eligible for MTF?
Under SEBI rules, MTF is allowed only on Group I equity shares and equity ETFs. From these, Bajaj Broking approves 900+ stocks* and sets a margin for each. The list changes, so check the MTF stock list before you buy.
How long can I hold shares purchased using MTF?
You can hold MTF positions for more than 365 days. Interest is charged on the funded amount for the entire holding period. The position may be liquidated if the minimum margin requirement is not maintained at any point.
Can I sell shares bought with MTF at any time?
Yes. You can sell MTF shares on any trading day [confirm any minimum holding]. The sale proceeds first repay the funded amount and interest due, and the balance stays in your trading account. Interest stops once the funding is repaid.
Can I convert an MTF position to delivery?
Yes. Pay the outstanding funded amount with interest and charges [in the app under path]. Once the payment clears, the shares are released from the MTF pledge and held as regular delivery shares in your demat account.
How do I unpledge MTF shares?
Repay the funded amount, fully or partly. The pledge on the matching shares is then released, and they appear as free holdings in your demat account.
What happens if the share price falls after I buy with MTF?
Your loss is magnified by the leverage. On a ₹1,00,000 position bought with ₹25,000 of your own money, a 10% fall is a ₹10,000 loss, or 40% of your money, before interest. If your margin drops below the required level, you get a margin call and must add funds, or the shares may be sold.
Is MTF legal and safe in India?
Yes, MTF is legal and regulated by SEBI. Bajaj Broking offers it as a SEBI-registered stockbroker (Reg. No. INZ000218931), and the shares you buy are held in your own demat account under a CDSL pledge that you authorise. It is still a leveraged product, so losses are magnified and positions can be sold if margin calls are not met.
Is MTF suitable for beginners?
MTF suits investors who understand leverage and interest costs and can check their positions daily. If you are new, start with a small position and less than the maximum leverage, keep spare funds for margin calls, and plan your exit before interest outweighs the expected gain.
Disclaimer
*Disclaimer for Bajaj Finance Limited (‘BFL’):
Stock trading business is carried by Bajaj Financial Securities Limited ("BFSL"), a broker and Depository Participant registered with Securities Exchange Board of India and offers various products/services related to Securities market (Securities market products/services). BFL merely facilitates display of data shared by BFSL on its webpage/mobile application. Such data received from BFSL, or any of its service providers is on “as is” basis. BFL does not make any representation or warranty, express or implied, regarding accuracy, completeness of such data displayed herein.
When you opt to avail the Securities market products/services of BFSL by clicking on the BFSL weblink/mobile app, you will be redirected to BFSL's web page/mobile app for initiation and completion of the transaction. You are supposed to exercise independent diligence by reading all the related documents carefully before deciding to invest in Securities market Products/services.
BFL is a Non-Banking Financial Company carrying the business of acceptance of deposits and providing lending solutions to Retail and Corporate customers. BFL does not offer nor advice on Securities market products/services and shall not be liable or responsible for any of your investment decision."
**Disclaimer: For Bajaj Financial Securities Limited
Investments in the securities market are subject to market risk, read all related documents carefully before investing.
Broking services offered by Bajaj Financial Securities Limited (Bajaj Broking). Reg Office: Bajaj Auto Limited Complex, Mumbai –Pune Road Akurdi Pune 411035. Corporate Office: Bajaj Financial Securities Limited, 1st Floor, Mantri IT Park, Tower B, Unit No 9 & 10, Viman Nagar, Pune, Maharashtra 411014. SEBI Registration No.: INZ000218931 | BSE Cash/F&O/CDS (Member ID:6706) | NSE Cash/F&O/CDS (Member ID: 90177) | DP registration No: IN-DP-418-2019 | CDSL DP No.: 12088600 | NSDL DP No. IN304300 | AMFI Registration No.: ARN –163403.
Details of Compliance Officer: Mr. Boudhayan Ghosh (For Broking/DP/Research) | Email: compliance_sec@bajajbroking.in | Contact No.: 020-4857 4486. For any investor grievances write to compliance_sec@bajajbroking.in/ compliance_dp@bajajbroking.in (DP related)
This content is for educational purpose only. Securities quoted are exemplary and not recommendatory.
Research Services are offered by Bajaj Broking as Research Analyst under SEBI Regn: INH000010043.
For more disclaimer, check here: https://www.bajajbroking.in/disclaimer