Margin Trading Facility (MTF) allows traders to buy stocks by paying only a part of the total value while the broker provides the rest.
- The trader brings in a margin amount, and the broker finances the remaining amount. Equity Leverage can be availed for up to 90 days under MTF.
- The full payment for the trade is required by the exchange, so the broker arranges the extra funds for a small interest charge.
- This facility is useful for those who want to take larger positions in stocks without investing the full amount upfront.
MTF is regulated by SEBI and has specific eligibility criteria for stocks and traders.