Frequently asked questions
Margin Financing account is where investors can boost their purchasing ability just by paying a small portion of the total value as margin. BFSL provides the rest of the funds at a low-interest rate using the client's cash or collateral.
If you already have a Demat account, simply visit the BFSL website and log in to the trading platform. Then, select margin and choose the stock you wish to trade and execute the transaction.
If you are not a BFSL customer, you need to first open a demat account with them. After that, you can follow the same process as mentioned above to trade on their platform.
The four main types of margins in trading are:
- Initial Margin
- Maintenance Margin
- Variation Margin
- Margin Call
There are three variants of MTF interest rates:
- Freedom Pack offers MTF interest rate of 18% p.a.
- Professional Pack offers MTF interest rate of 12.5% p.a.
- Bajaj Privilege Club offers MTF interest rate of 10.75% p.a.
Yes, having a Demat account is mandatory for Margin Trade Financing.
The maximum limit for Margin Trade Financing with BFSL is Rs. 90 crore.
The trade will be liquidated if the minimum margin requirement is not met if the margin drops below the minimum needed amount.
Given below are the advantages of MTF:
- Increase capital return with minimal capital allocation
- Ideal for traders looking for short-term gain
- MTF at one of the lowest interest rates
- Enhances diversification of investor’s portfolios
- Hold equities for a year with a small margin
- Dedicated Relation Manager
Margin Trade Financing allows investors to increase their buying power by paying just a fraction of the total value as margin. The remaining amount is funded by BFSL at a nominal interest rate.
Yes, MTF is a secured. The securities eligible for margin trading are determined by SEBI and the exchanges, and may change periodically.
No, intraday trade is not allowed under Margin Trade Financing.
