WHAT ARE MTF STOCKS AND HOW DO THEY WORK?

What are MTF Stocks and How Do They Work?

What are MTF Stocks and How Do They Work?

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In today’s fast-moving markets, many investors are keen on amplifying their buying power — and that’s where mtf stocks come in.
MTF, or Margin Trading Facility, allows investors to buy stocks by paying only a fraction of the total value upfront, with the rest funded by the broker.

How MTF Works:

  • You open a margin trading account with a broker.

  • Select MTF-eligible stocks (brokers provide an MTF stock list).

  • Pay a margin amount (usually between 20%-50% of the stock value).

  • The broker funds the balance while charging interest on the borrowed amount.

Example:

Stock Price Margin Required (25%) Broker Funds
₹1,00,000 ₹25,000 ₹75,000

With ₹25,000, you control ₹1 lakh worth of shares!

Benefits of MTF Stocks:

  • Increased buying power with less capital.

  • Flexibility to hold positions longer than intraday.

  • Portfolio diversification without heavy cash flow.

Risks to Remember:

  • Interest cost adds up quickly.

  • MTM (Mark-to-Market) losses can lead to margin calls.

  • Only SEBI-approved stocks are eligible under MTF.

In short, MTF stocks offer a fantastic opportunity for leveraged trading, but they demand disciplined risk management. Always consult your broker’s mtf stock list and use margin wisely.

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