What is MTF in Stock Trading?
What is MTF in Stock Trading?
Blog Article
MTF stands for Margin Trading Facility, a service that allows investors to buy stocks by paying only a part of the total value upfront, while the rest is funded by the broker. It's a popular tool for active traders looking to amplify their buying power and take advantage of short- to medium-term price movements.
How Does MTF Work?
Let’s say you want to buy shares worth ₹1,00,000. With MTF, you might only need to put in ₹25,000–₹50,000 as margin, and your broker covers the rest. You pay interest on the borrowed amount until you square off or sell the position.
What Are MTF Stocks?
mtf stocks are shares that are approved by the broker for margin trading. These typically include:
High liquidity stocks
Nifty 50 and Sensex constituents
Stocks with stable price movements
SEBI-compliant securities
Not every stock is eligible, so brokers provide a curated MTF stock list that complies with risk and regulatory guidelines.
Benefits of MTF
Leverage: Trade more with less capital.
Flexibility: Hold positions beyond intraday (as per broker’s terms).
Opportunity: Capture gains in trending markets.
Final Words
MTF is a powerful tool, but it comes with higher risks due to leverage. Always use it with proper strategy and discipline—and make sure to trade only in approved MTF stocks to ensure compliance and risk management.
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