Question 1

What are the advantages of using the Pay Later (MTF) facility?

Accepted Answer

With the Pay Later (MTF) facility, you can generate short-term profits by pledging the same shares.
You can maximise your gains with the leveraged positions. While MTF trading can be advantageous in
more than one way, you must gauge your risk appetite and follow risk management.

Question 2

What is the “Required Margin” in MTF trading?

Accepted Answer

The Required Margin in MTF trading is the minimum amount of margin that you need to pay for entering
into the trade. For example, if the broker offers an 80% margin of the total trade value, then the
balance of 20% that you pay is termed the ‘Required Margin’. The required margin must be maintained
at all times to avoid auto square-off of your position.

Question 3

What is the minimum interest amount charged on margin trading?

Accepted Answer

m.Stock Pay Later (MTF) has one of the lowest interest rates starting at 0.0192% per day for funding
above ₹5 crore. For funding up to ₹25 lakh, 0.0411% per day interest & above ₹25 lakh to ₹5 crore,
0.0274% per day interest is applicable. Apart from MTF interest, no subscription fees is charged on
MTF trades conducted at m.Stock.

Question 4

How is interest calculated in MTF?

Accepted Answer

In MTF, interest will be calculated on the gross funded amount for the number of days you hold the
position open. So, if your funding amount is Rs 25 lakhs and you hold the position for 2 months,
then the applicable 0.0411% per day interest rate will be charged for 2 months on a pro-rata basis.

Question 5

How does m.Stock charge interest on availing Pay Later (MTF)?

Accepted Answer

With m.Stock Pay Later (MTF), interest will be charged for the gross funded amount for the number of
days that you hold the position.

Question 6

How to reduce interest rate on MTF trades?

Accepted Answer

Interest charged on MTF trades reduces as the accumulated funding amount goes up. For total MTF
funding of up to ₹25 lakh, interest rate of 0.0411% per day and above ₹25 lakh to ₹5 crore, interest
rate of 0.0274% per day is applicable. However, if the funding amount goes above ₹5 crore, interest
rate drops to 0.0192% per day, which is one of the lowest Pay Later (MTF) interest rates in the
industry.

Question 7

How long can I hold MTF?

Accepted Answer

In Pay Later (MTF) the duration for which you can hold a position varies depending on the broker's
policies and regulatory guidelines. Most brokers may allow you to hold positions for up to 365 days
(1 year). m.Stock, on the other hand, allows you to hold your MTF positions indefinitely as long as
you meet the margin requirements and pay the applicable interest. However, it's crucial to monitor
your positions regularly and ensure you maintain the required margins to avoid forced liquidation.
Always check your broker’s terms for specific holding periods.

Question 8

Is MTF trading profitable?

Accepted Answer

MTF trading can be profitable, offering leverage that allows you to take larger positions with less
capital. This can amplify gains if the market moves in your favour. However, it also increases risk,
as losses can be magnified. The interest costs associated with MTF can also impact profitability.
It's essential to have a well-thought-out strategy, understand the risks, and regularly monitor your
positions to maximise the potential for profit while managing risks effectively.

Question 9

Do I have to pay interest for trading holidays as well?

Accepted Answer

Yes, in Pay Later (MTF), interest is typically charged on the borrowed funds for every calendar day,
including trading holidays and weekends. This means that even when the stock market is closed, the
interest on your margin loan continues to accrue. It's important to factor in these costs when
planning your MTF strategy to ensure that you are aware of the total expenses involved and can
manage your investments effectively. Use m.Stock’s MTF calculator to accurately assess your MTF
requirements and associated interest amounts.

Question 10

Is the MTF interest shown in the calculator inclusive of GST and charges?

Accepted Answer

Typically, the MTF calculator shows base interest only. GST and other charges like DP fees or
transaction costs may not always be included. You should check with your broker or platform for a
detailed cost breakdown. Use the MTF margin calculator as a reference, but account for final
deductions when evaluating the total cost.

Question 11

What are the benefits of Pay Later (MTF) Trading?

Accepted Answer

Gain higher exposure: You can easily increase your buying power by paying a small margin (a
 percentage) of the total trade value.
 Hold shares longer: Pay Later (MTF) allows you to hold your delivery-based positions for an
 extended period, which helps you benefit from a medium-to-long-term price appreciation. With
 m.Stock You can hold your MTF positions for an unlimited period.
 Capital efficiency: Pay Later (MTF) allows you to spread your available capital across multiple
 positions rather than blocking it all in a single trade. 
 Flexible: You can use the margin facility when you do not want to deploy your capital fully or when
 you are low on funds, but want to take advantage of a market opportunity.
 Increase liquidity: Pay Later MTF provides instant access to funds for trading, helping you
 capitalise on new opportunities without waiting for funds to come in.

Question 12

Can MTF be used for long-term investments?

Accepted Answer

Yes. You can use the Margin Trading Facility for long-term investing. There is no restriction on how
long you can hold the position once created. You can buy and carry delivery-based positions using
either pledged shares or your own capital through brokers like m.Stock

Since there is no tenure limit, you can stay invested for several months or more. This feature is
useful for those who want to build larger exposure and prefer flexibility. The pledging system is
transparent and follows SEBI rules. Furthermore, you can track your interest and trade status in
real time on your broker’s platform like m.Stock.

Question 13

How to calculate interest on MTF?

Accepted Answer

You can calculate interest on MTF by using the following formula

Interest = Funded amount × daily interest rate × number of days

Here, the funded amount is the portion of the trade value that your broker provides after you pay
your initial margin.

The daily interest rate is the rate charged by the broker on this funded amount per day. Moreover,
the number of days is the total duration you keep the MTF position open, from the trade execution
day until you close the position or repay the funded amount.

While this formula provides a basic estimate, manually calculating interest for multiple trades or
varying holding periods can be cumbersome and error-prone. For precise and quick calculations, you
can use the m.Stock Pay Later (MTF) Calculator. This way, you can know the exact interest cost
before placing your trade and plan your funds efficiently.

Question 14

Is MTF really free for lifetime?

Accepted Answer

MTF is not typically free for a lifetime, even if some brokers promote it that way. In most cases,
this type of offer means zero brokerage or reduced charges for a limited period. However, the
interest on the borrowed amount still applies.

MTF works like short-term funding for delivery trades. Here, the interest is charged based on how
long you use the margin. It is always better to read the terms carefully and check the interest
rate, holding conditions, and exit charges before using MTF regularly.

Question 15

What are the costs involved in MTF trading?

Accepted Answer

In MTF trading, investors pay interest only on the amount funded by the broker. The interest rate
usually falls within a defined range and varies based on the funding slab and broker policy. To use
MTF, you must maintain the required margin, either by adding cash or by pledging eligible shares
from your demat account.

Most brokers do not charge upfront fees to activate MTF. Additionally, the pledging fee is either
minimal or waived by many platforms. Besides, brokerage on MTF trades depends on the broker’s
pricing model. Some brokers like m.Stock offers zero brokerage on delivery trades and charges a flat
rate (for example, flat ₹5 per order) on MTF/intraday orders, while others use a percentage‑based
brokerage.

Features	m.Stock	Industry
1 Interest rate	0.0192% - 0.0411% per day	Up to 0.0493% per day
2 Holding Period	Unlimited	365 days
3 Funding %	Up to 80%	50% - 70%
4 Pledge charges	₹32	Up to ₹35
5 Subscription Charges	₹0	Up to ₹10,000
6Hidden Charges	No hidden charges	Other charges

Pay Later (MTF) Calculator

What is a Pay Later (MTF) Calculator?

An Example to Understand Pay Later (MTF) Better

Benefits of Pay Later (MTF)

How is m.Stock Pay Later (MTF) Unique?

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