Margin Trading Facility in India - Buy 4X More Stocks with Less Capital
Amplify your buying power up to 4x leverage with Shriram Financial Services trusted MTF platform. Trade approved NSE/BSE stocks with low margins, transparent interest rates, and secure settlement.
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Margin Trading Facility: Trade with More Buying Power
Looking to Maximise Your Buying Power up to 4x? Margin Trading Facility (MTF) helps you take larger positions in the stock market by paying only a part of the total trade value upfront, while the remaining amount is funded by your broker. Unlike intraday trading, MTF lets you hold your shares for a longer period, giving you greater flexibility to manage your investments, with margins range starting from 30% of the approved equity shares. With Shriram Financial Services, you can trade using MTF through a seamless platform, competitive funding, powerful trading tools and advisory support to help you make the most of market opportunities.
MTF Vs Intraday Vs Futures
Feature
Margin Trading Facility (MTF)
Intraday Trading
Futures Contracts
Definition
SEBI‑approved margin funding where broker finances part of stock purchase
Buying and selling shares within the same trading day
Derivative contracts to buy/sell assets at a future date
Holding Period
Days, weeks, months (whatever is allowed by Broker) as long as margin is maintained. T+180 days
Must be squared off before market close
Fixed expiry cycles (monthly/quarterly)
Delivery of Shares
Yes, actual shares delivered and pledged as collateral
No delivery, only buy/sell within the day
No delivery, only contract settlement
Leverage Available
Up to 4x buying power depending on broker & stock eligibility
Limited leverage, usually 5x–10x intraday
High leverage depending on contract size
Risk
Margin calls, interest costs, forced liquidation
High volatility, risk of intraday losses
Market risk, rollover costs, margin requirements
Best Suited For
Long‑term investors seeking leverage with delivery
Traders looking for short‑term price moves
Hedgers/speculators managing future price risk
How MTF Works
With Margin Trading Facility (MTF), you can buy stocks by paying only a fraction of the total value upfront - Shriram Financial Services funds the remaining amount. You can hold your leveraged position for up to 180 days, giving you the flexibility to stay invested without paying the full cost immediately. Whenever you're ready, simply repay the funded amount to get the shares transferred directly from Pledge status to Free balances/pledge is released in your demat account - a process known as Convert to Delivery (CTD).
Here's how it works with a simple example. Suppose you want to buy shares worth ₹1,00,000, and the applicable margin requirement is 25%. You pay ₹25,000 upfront, while Shriram Financial Services finances the remaining ₹75,000. Interest is charged only on this financed amount of ₹75,000, and only for the period it stays utilised. Once you repay the financed amount in full, your shares are transferred into your demat account through the CTD process and the position is entirely yours.
True Cost of MTF
Variable
Value
Total trade value
₹1,00,000
Your margin (25%)
₹25,000
Broker-funded amount (75%)
₹75,000
MTF Interest Rate
15.99% p.a.
Holding period
180 days
Daily interest on ₹75,000
₹75,000 × 15.99% ÷ 365 = ₹32.86/day
Total interest for 180 days
₹5914
Equivalent Personal Loan cost (at 18%)
₹75,000 × 18% ÷ 365 × 180 = ₹ 6658
MTF saving vs unsecured borrowing
~₹744 for this 180-day trade
Key Benefits of MTF – Why Use Leverage Trading?
Margin Trading Facility (MTF) offers six core advantages for delivery-based equity investors. Unlike intraday trading, MTF lets you hold positions for extended periods - up to 180 days - while unlike futures, you gain actual ownership of the shares in your demat account. At its heart, MTF amplifies your buying power without sacrificing the benefits of delivery-based investing.
BUYING POWER 4X
Up to 4X your Capital
HOLDING 180 days
No Forced Overnight Exit
SHARE OWNERSHIP YES
Demat Credit + Dividends
CAPITAL FREED 75%
With 25% Margin example
- Amplified Buying Power - With up to 4x leverage, you can purchase more shares than your capital alone would allow, maximising portfolio exposure.
- More Holding Period - Unlike intraday trades, MTF positions can be held for days, weeks, or months, provided margin and interest are maintained.
- Delivery of Shares - You receive actual shares in your demat account, pledged as collateral, ensuring ownership rather than just speculative contracts.
- Portfolio Diversification - Access high‑value stocks with limited capital, enabling broader diversification across sectors.
- No Forced Square‑Off - Unlike intraday trading, there's no mandatory end‑of‑day closure, giving you flexibility to exit when market conditions suit you.
- Strategic Hedging - Investors can use MTF to hedge long‑term positions while maintaining liquidity for other opportunities.
Disadvantages of Margin Trading Facility
While Margin Trading Facility (MTF) offers leverage and flexibility, it also comes with certain drawbacks that investors must carefully consider before using it.
- Daily Interest Costs - Brokers charge daily interest on the funded portion. Over time, this can significantly reduce net returns, especially if positions are held for weeks or months.
- Margin Call Risk - If the value of pledged shares falls below the required margin, the broker issues a margin call. Failure to top up funds can lead to forced liquidation.
- Forced Liquidation - Brokers may sell pledged shares without investor consent to recover dues, potentially locking in losses.
- Limited Stock Eligibility - Only SEBI‑approved NSE/BSE stocks are eligible. This restricts opportunities compared to broader equity or futures markets.
- Leverage Amplifies Losses - Just as leverage magnifies gains, it also magnifies losses. A small decline in stock price can wipe out margin capital.
- Compliance & Documentation - Investors must complete pledging formalities and adhere to SEBI regulations, which can feel complex compared to simple delivery trades.
Risk Disclaimer: Margin trading involves significant risk and is not suitable for all investors. Leverage can magnify losses as well as gains. Please read all risk disclosures before activating MTF.
MTF Interest Rate & Charges
Margin Trading Facility (MTF) interest is charged daily on the broker‑funded portion of your trade. Annual rates in India typically range between 16% and 18% p.a., depending on the broker. Our rate is 15.99% p.a., or about 0.043% per day. Understanding the cost structure is essential before using leverage.
Quick-Reference: MTF Interest Rate Comparison
Fee Component
Rate / Amount
Frequency
Notes
MTF Interest Rate
15.99% p.a. (0.043% per day)
Daily (on funded amount only)
Not charged on your own margin capital
Effective Daily Rate (at 15.99%)
~₹0.44 per ₹1,000 funded
Per calendar day
Example: ₹75,000 funded × 30 days = ~₹986
Margin Pledge Charge
₹10 per transaction
Per transaction
Charged on pledge activation and release
Brokerage
Standard equity delivery rates
Per order
Same as regular delivery purchase
Annual Maintenance Charge (AMC)
₹200 per annum
Annual
-
Margin Shortfall Penalty
As per SEBI/exchange norms
If triggered
Charged only when margin falls below threshold
Foreclosure / Prepayment
Nil
N/A
No charges for early repayment
STT (Securities Transaction Tax)
0.1% on sell side
Per trade
Same as normal delivery trades
Our MTF interest rates are among the most competitive in the market. Login to your account or contact support for your personalised MTF rate.
MTF Eligible Stocks & Margin Requirements
Margin Trading Facility (MTF) is available only on SEBI‑approved NSE/BSE stocks that meet liquidity and compliance criteria. Brokers publish an updated list of eligible stocks along with margin requirements and haircut percentages.
The exact list of MTF-eligible stocks is updated periodically per SEBI/exchange guidelines. Log in to your account to view the complete, current MTF stock list with live margin requirements.
How to Activate MTF on Your Account?
Activating Margin Trading Facility (MTF) is a simple process, but it requires compliance with SEBI regulations and broker procedures. Once enabled, you can start leveraging your capital with up to 4x buying power.
Step‑by‑Step Activation Process
Access Account
Log in to your Shriram FS trading account.
Submit MTF Consent
Submit digital MTF consent with OTP verification.
Account Activation
MTF is activated after KYC verification approval.
Risks of Investing in Margin Trading Facility
Margin Trading Facility (MTF) offers leverage, but it also carries risks that every investor must understand before using it. SEBI regulations require brokers to disclose these risks clearly, and investors should evaluate them carefully.
Key Risks of MTF
- Daily Interest Burden - Interest is charged daily on the broker‑funded portion. Holding positions for weeks or months can significantly increase costs, reducing net returns.
- Margin Call Trigger - If the value of pledged shares falls below the required margin, the broker issues a margin call. Investors must add funds or collateral to maintain the position.
- Forced Liquidation - If margin calls are not met, brokers may liquidate pledged shares without investor consent, potentially locking in losses.
- Amplified Losses - Leverage magnifies both gains and losses. A small decline in stock price can wipe out margin capital.
- Margin Shortfall Penalty - Exchanges impose penalties if margin requirements are not met, adding to trading costs.
- Limited Stock Eligibility - Only SEBI‑approved NSE/BSE stocks are eligible, restricting opportunities compared to broader equity or futures markets.
Why Choose Shriram Financial Services MTF?
Empower your trades with transparent charges, flexible margins, and SEBI‑approved leverage - all designed for smarter, safer investing. Here is everything you get when you use MTF on our platform:
Feature
Our MTF Offering
Notes
MTF Interest Rate
15.99% p.a.
Personalised rates available for high‑volume traders
Minimum Margin
As low as 25% (stock‑dependent)
Determined by exchange‑defined haircut percentages
Maximum Leverage
Up to 4x buying power
Subject to stock eligibility and available margin
Eligible Stocks
700+ NSE/BSE‑approved stocks
Updated regularly per SEBI and exchange guidelines
Pledge Charges
₹10 per transaction
No hidden or surprise fees
Interest Billing
Daily, on broker‑funded amount only
Charged only for actual holding days
Square‑Off Policy
No forced overnight exit
You decide when to exit - full flexibility
MTF Activation
Free, one‑time digital setup
Complete activation within minutes
MTF SEBI Regulations & Compliance
Margin Trading Facility (MTF) in India is a SEBI‑approved product, fully regulated to protect investors and ensure transparency. Brokers must strictly follow SEBI circulars and exchange guidelines when offering MTF.
SEBI Guidelines for MTF
- Regulatory Circulars: Governed by SEBI circular CIR/MRD/DP/54/2017 and subsequent amendments.
- Broker Eligibility: Only SEBI‑registered brokers with specific approval can offer MTF.
- Stock Eligibility: NSE/BSE define eligible securities based on liquidity and market cap.
- Margin Requirement: Brokers must collect minimum upfront margin as per exchange rules.
- Funding Source: MTF positions must be funded via broker's own capital or NBFCs - not client funds.
- Pledged Shares: Shares bought under MTF remain in the client's demat account, pledged as collateral.
- Daily MTM: Mark‑to‑market is applied daily; margin shortfalls must be rectified promptly.
Open Your Free Demat Account In Minutes
100% digital, paperless, and SEBI-compliant. Activate MTF and trade with funded margin, with expert advisory from day one.
Got Questions?
View All FAQsMTF allows investors to buy shares by paying a margin, while the broker funds the balance. Interest is charged daily on the funded portion.
Yes. MTF is a SEBI‑regulated facility offered by registered brokers on NSE and BSE. It is subject to strict compliance, investor protection norms, and transparent operational guidelines.
Only SEBI/NSE/BSE‑approved “Group I” securities and select ETFs based on liquidity and market cap.
Typically, 25% – 50% depending on the stock category, with haircuts applied as per SEBI rules.
Need A Clearer Direction?
Let's get in touch on a 15-minute call where we can answer any questions you may have. Our advisor will explain how margin funding, interest and square-off rules apply to your trades.