MTF enables the investor to purchase shares and securities with the benefit of margin. The investor can either use the cash as margin or pledge the approved shares and securities. After the purchase order is executed, the investor gets the shares and securities post repayment of the availed margin.
Clients can avail margin in MTF by bringing in cash or shares as collateral. When a client brings in cash as collateral, a client will get 4x margin for the amount transferred to his/her MTF account. An interest rate of 18% per annum is charged on the utilized margin after adjusting the cash margin. For example, if a client transfers Rs 1 lakh to his/her MTF account, then the client can buy shares worth Rs 4 lakhs and if the client has bought shares for 1.5 lakhs through MTF, then an interest rate of 18% is charged only on Rs.50,000 as Rs 1 lakh cash margin is provided by the client.
When a client brings shares as collateral, he will get up to 4x margin based on the shares as margin differs for various shares and only a few shares are eligible to be given as collateral. You can get the list of approved shares and securities from our website from here. An interest rate of 18% per annum is charged on the utilized margin. For example, if a client gives shares worth Rs. 1 lakh as collateral, then he is eligible for up to 4x margin i.e. up to Rs 4 lakhs based on the eligible shares. Now, if he buys shares worth Rs 1.5 lakhs by utilizing MTF margin, then an interest rate of 18% is charged on Rs 1.5 lakhs.
Whenever there is a shortfall, you are given 5 working days from the date of margin call to make good for the margin shortfall or mark to market losses. If you fail to pay the shortfall, your positions will be squared off according to the prevailing market price. Also, read our MTF terms and conditions before trading with MTF.
Generally, to perform trade, the investor requires fund in his or her account. Sometimes, the fund in the wallet may not be sufficient to purchase the desired stock. In this situation, the investor can enable the Margin Trading Facility where the investor can borrow a specific amount from the broker to buy the stocks.
The investor has to put in a certain percentage of the total share price as the margin and the remaining is paid by the broker. This margin amount varies with stocks and securities. Thus, as a broker, Flattrade leverages your fund, enabling you to purchase the shares.
The maintenance of margin in your account varies with the stocks. The below table explains the initial margin and the maintenance margin.
|Category of Stock
|Initial margin & maintenance margin as prescribed by SEBI
|Initial margin and maintenance margin as set-in trading platform
|Group I stock available for trading in F&O Segment
|VaR + 3 times applicable ELM
|VaR + 4 times applicable ELM with minimum margin of 25%
|Group I stock other than F&O stocks
|VaR + 5 times ELM
|VAR + 6 times ELM with minimum margin of 25%
MTF is available only under Cash segments for certain stocks traded only in NSE stock exchange.
There is no charges to enable MTF in your account. If you have an existing Flattrade trading account, you can enable MTF by mailing a separate request to [email protected] . If you are new to Flattrade, you may require opening a new trading account with us and then activate MTF linked to that account.
You will get a detailed email with all the information regarding your MTF transaction to your registered mail ID.
Yes, the corporate benefits will be credited to your account that is linked to the trading account.
Just like adding funds to your cash segment, you can add funds to your MTF segment. After enabling MTF on your account, login to your Flattrade app. Now, go to the MTF segment and add cash.
Yes, you can shift or transfer the funds between segments online. You can transfer the fund online by the MTF fund transfer option given in the APP and Web trading platforms or by mailing us at [email protected] and our team will add the fund from equity to MTF upon receiving the mail request.
In MTF, trading is allowed only against the available margin. To execute a purchase, you need cash or margin credit balance before entering into the trade. In case you do not have cash margin, you can pledge the approved shares and securities to gain a credit balance.