MTF gives you more buying power, but the risks are proportionally higher too. Here is what to be aware of before using it.
1. Losses are magnified
You are buying more shares than your capital alone allows. If the stock falls, your losses are multiplied by the leverage. A 10% drop on a 5x leveraged position means a 50% loss on your actual margin.
2. Margin shortfall and auto square-off
If the value of your pledged shares drops below the required margin level, a shortfall is triggered. Samco will alert you via SMS and email. If you do not add funds or pledge more securities in time, the system will automatically square off your position.
3. Daily interest adds up
MTF charges 0.05% per day on the funded amount. On ₹40,000 funded, that is ₹20 per day — around ₹600 a month. For longer holding periods, this cost becomes significant and should factor into your decision.
4. Exchange restriction
If you buy an MTF stock on NSE, you can only sell it on NSE. Shifting a position between exchanges is not allowed.
5. Stock SIP orders are not supported
You cannot place Stock SIP orders using MTF. GTT (Good Till Triggered) orders, however, can be placed.
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