Table of content

What is eMargin Trading

Table of content

Does m.Stock offer MTF for an Unlimited Number of Days?

Contrary to popular opinion, you don’t need large sums of money to trade or invest in the stock market. Many stockbrokers offer a unique facility known as Margin Trading Facility (MTF) that allows traders and investors to purchase stocks even with limited capital. Interested in getting to know more about MTF? Here’s a comprehensive guide on what margin trading in the stock market is and how m.Stock’s offering is better compared to the industry standard.

What is a Margin Trading Facility (MTF)?

Margin Trading Facility, also known as eMargin, is a facility offered by many stockbrokers to their clients. Using this facility, you can purchase shares by simply paying a percentage of the total trade value. The remaining amount will be funded by the stockbroker offering this facility.

Since you’ve essentially borrowed money from your broker, you will have to pay interest at a specified rate till the time you decide to repay. Also, as additional security against default, the stockbroker will create a pledge on the shares you bought as collateral.

Here’s an example to help you understand what eMargin trading is and how it works.

Assume that you wish to purchase 100 shares of Reliance Industries Limited. Currently, the share price is ₹2,500. This would mean that you need about ₹2,50,000 to purchase 100 shares of the company. Unfortunately, you don’t have the requisite amount that you need to execute this trade.

Therefore, you decide to use the eMargin facility of your stockbroker. Assuming your broker provides 75% funding in Reliance Industries Ltd., you can buy stocks worth ₹2.5 lakh against ₹50,000 in your trading account.

The shares purchase under MTF (eMargin) are pledged with the brokers. m.Stock is one of the only broker in India that offers a pre-pledged faciltiy where shares are first pledged and then the purchase order goes to. Now, since m.Stock charges one of the lowest interest rates of 9.99% per annum for funding below ₹25,00,000 lakhs, because your funding amount is ₹2.5 lakh you will pay 9.99% interest rate which comes to 0.027% per day.

Does m.Stock Offer MTF for an Unlimited Number of Days?

Usually, most stockbrokers have a set limit on the holding period of stocks purchased through the eMargin facility. For instance, let's say that the maximum holding period of MTF stocks is 365 days. In this case, you can hold these stocks only for that number of days. Once you reach the holding limit, you will have to sell the stocks and repay the outstanding balances along with interest to your broker.

Here’s where m.Stock’s eMargin facility comes into the picture. Unlike other stockbrokers, m.Stock does not have a limit on the holding period of MTF stocks. This effectively means that you can hold the stocks you purchased via this facility for an unlimited number of days.

The Benefit of MTF Holding for an Unlimited Number of Days

Now that you know that m.Stock offers an unlimited MTF holding period, let’s take a look at how it benefits you.

Since there’s no limit on the holding period, you can continue to have the MTF stocks in your portfolio up until the day you decide to sell it off provided you make interest payments and meet margin calls, if any. Unlike other brokers, m.Stock will not force you to liquidate your MTF stocks on account of reaching the holding period limit.

Conclusion

With this, you must now be aware of what Margin Trading Facility is and how it can help you purchase shares even when you’re falling short of funds. As you can see, m.Stock’s eMargin facility is one of the best in the industry.

In addition to an unlimited holding period on MTF stocks, m.Stock also levies some of the lowest interest rates on borrowed funds. Furthermore, you get up to 80% funding on more than 700 mtf stock list. m.Stock offers all of these benefits and more without levying any subscription or hidden brokerage charges whatsoever.

More Related Articles

what is span and exposure margin

10 January,2024

What is Margin & SPAN Exposure

In the world of trading, understanding margin exposure and SPAN exposure is crucial for successful and responsible investing. Margin and SPAN exposure are two terms commonly used in trading circles. In this blog, we will delve into the concepts of margin exposure and SPAN exposure, exploring their significance and how they impact trading strategies.

Margin against Stock

13 November,2023

Margin against shares: Unlock your hidden trading potential!

Some trades require you to invest a lot of capital, which you may not always possess. Arranging funds at short notice might be difficult. At the same time you don't want to miss out on lucrative trading opportunities. This is where the concept of margin against shares can help. As a trader, you can use this facility to bridge capital shortfall and ensure you don’t miss out on profitable opportunities. Read to know more about margin against shares and how it works.

Tips for Margin Trading

13 November,2023

What is Collateral Margin?

Margin trading is a popular strategy in financial markets that allows traders to amplify their potential returns by borrowing funds from a broker. One of the key tools used in margin trading is the Margin Trading Facility (MTF). In this blog, we will explore what MTF is, the benefits of margin trading, and provide valuable tips for successful margin trading. By following these tips, you will be in a position to maximise your returns while effectively managing the associated risks.

Open your Lifetime Free Brokerage Account Onboarding in just 5 minutes**

+91
T&C and privacy policy

Power your investments with our smart trading platforms

mobilefooterimg
  • app_download_icon_img
    5 million+
    App downloads
  • 1_Click_icon_img
    1-Click
    Order Placement
  • higherreturns_icon_img
    2,361 Crore+
    Average Daily Turnover