Samco Securities offers a Margin Trading Facility (MTF) that allows clients to increase their buying power in the stock market. With MTF, you can borrow money to invest in approved shares and take bigger positions than your cash alone would allow. This facility follows SEBI rules and is designed to keep trading safe and transparent.
To use MTF, you need an active trading and demat account with Samco and must sign the MTF agreement as per SEBI guidelines. Once done, you can get up to 4X leverage on eligible stocks. Samco offers a list of more than 800 securities that qualify for MTF, and this list is updated from time to time to manage risks.
When you trade on margin, you must keep a minimum margin in your account. Your positions are checked daily through a process called mark-to-market (MTM). If the market moves against you and your margin is not enough, you will need to add more funds within the given time. If you don’t, Samco may sell some of your holdings (square off) to cover the shortfall.
All MTF trades are auto-pledged. This means the shares you buy under margin are pledged in favor of Samco. You don’t need to unpledge them to sell. Once sold, the money is first used to clear any outstanding balance, and the remaining amount is credited to your account.
There is also a nominal cost for using MTF. An interest of 0.05% per day is charged on borrowed funds, along with regular brokerage and statutory charges. Since MTF involves leverage, you must always track your trades and margins carefully.
Samco may also change margin rules, update the list of approved securities, or square off positions if risks increase. These measures are in place to protect both clients and the broker in volatile markets.
In short: MTF is a useful tool for traders who want to take bigger positions and aim for higher returns. But it also comes with responsibilities. To use it successfully, you must stay informed, maintain margins, and monitor the market closely.
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