Margin Trade Funding (MTF) India
Margin Trade Funding, or MTF, lets you buy more shares than your available cash alone would allow, by borrowing part of the trade value from your broker against SEBI-regulated terms. Fortune Wealth, as an authorised person under Motilal Oswal Financial Services, gives you access to MTF on eligible NSE and BSE stocks, with transparent interest costs and a relationship manager to help you track your positions. Because leverage cuts both ways, this page leads with how MTF works and what can go wrong, before it gets to how to start.
What Margin Trade Funding Covers
Under MTF, you pay a minimum upfront margin, currently at least 25% of the trade value as per SEBI norms, and the broker funds the remaining amount at an interest cost. The shares you buy are automatically pledged with the depository in your broker’s favour as collateral, though ownership of the shares stays with you throughout. Only SEBI and exchange-approved securities are eligible for MTF, selected based on liquidity and volatility, so not every stock on the market qualifies.
| MTF Mechanic | How It Works |
|---|---|
| Upfront Margin | You contribute a minimum of 25% of the trade value in cash or approved collateral. Fortune Wealth, through Motilal Oswal, funds the remaining amount, subject to stock eligibility. |
| Leverage Available | Up to 4X, depending on the SEBI-prescribed margin requirement for that specific stock. Not every stock qualifies for the maximum leverage. |
| Interest on Funded Amount | A standard interest rate of 0.041% per day, approximately 15% per annum, is charged only on the amount funded by Motilal Oswal, calculated from T+1 until the position is closed or converted to delivery. |
| Pledge | Shares bought under MTF are automatically pledged with the depository in favour of the broker. Ownership stays with you, the broker holds a pledge as collateral. |
| Eligible Stocks | MTF is available only on SEBI and exchange-approved securities, selected based on liquidity and volatility. Not all listed stocks qualify. |
| Holding Period | Positions can be held for an extended period, 365 days and beyond, as long as the required margin is maintained in your account throughout. |
Understand the Risks Before You Use MTF
If a stock bought under MTF falls in price, your loss is calculated on the full trade value, not just the margin you put in. A relatively small price drop can wipe out a large share of your own capital.
- Margin calls — if the value of your pledged shares falls and your margin balance drops below the required maintenance level, you will be asked to add funds or securities. If you do not respond in time, the broker can square off your position at the prevailing market price, which may lock in a loss.
- Interest cost erosion — interest on the funded amount accrues daily from T+1, including non-trading days, for as long as the position stays open. A position that looks profitable on paper can turn unprofitable once funding costs are subtracted.
- Eligibility can change — SEBI and exchange rules on which stocks qualify for MTF, and at what margin percentage, are reviewed periodically and can change without notice, which can affect your existing positions.
- Concentration risk — using leverage to buy more of a single stock or a small set of stocks concentrates rather than spreading it, which can magnify losses if that stock or sector underperforms.
MTF is not suited to every investor. It is built for those who actively track their positions, understand margin mechanics, and can respond quickly to a margin call. If you prefer to invest without leverage, Fortune Wealth’s regular delivery-based stock trading and Model Portfolios may be a better starting point.
How Fortune Wealth Supports Your MTF Trading
- Free Consultation — understand whether MTF fits your risk appetite and trading style
- Investor Risk Profiling — a short assessment before any leveraged position is discussed
- Account Setup — demat and trading account activated for MTF through the Motilal Oswal partnership
- Guided Trade Execution — order placement support on MTF-eligible stocks with margin requirements explained upfront
- Ongoing Monitoring — your relationship manager helps you track margin levels and interest accrual so you are not caught off guard by a margin call
Who This Is For
- Active traders comfortable monitoring positions daily and responding quickly to margin calls
- Investors with a short to medium-term view on a specific stock who want to size up a position beyond their available cash
- Existing equity investors who understand leverage and want to use MTF selectively rather than across their whole portfolio
- Investors who already hold shares and want to use Shares as Margin to unlock additional buying power without depositing fresh cash
Why Fortune Wealth
- MTF access through Motilal Oswal, a SEBI-registered broker with transparent, published interest rates
- Authorised person under Motilal Oswal Financial Services, one of India’s largest broking platforms
- SEBI-registered entity with offices in Vile Parle and Kandivali, Mumbai
- One dedicated relationship manager to help you track margin levels, not a rotating support queue
- 25+ years of experience across equity, mutual funds and portfolio management
FAQ
Frequently Asked Questions
MTF is a SEBI-regulated facility that lets you buy shares by paying a minimum of 25% of the trade value upfront, with the broker funding the rest at an interest cost. The shares purchased are automatically pledged with the depository as collateral.
Motilal Oswal offers leverage of up to 4X on MTF-eligible stocks, though the exact leverage depends on the SEBI-prescribed margin requirement for that specific stock. Not every stock qualifies for the maximum leverage.
A standard interest rate of approximately 0.041% per day, close to 15% per annum, is charged on the amount funded by the broker, calculated from T+1 until the position is closed or converted to delivery.
If the value of your pledged shares falls and your margin balance drops below the required maintenance level, you will receive a margin call asking you to add funds or securities. If this is not met in time, the broker can square off your position, which may result in a loss.
MTF positions can be held for an extended period, 365 days and beyond, as long as you maintain the required margin throughout. However, daily interest continues to accrue for as long as the position stays open, so long holding periods increase the total interest cost.
No. MTF is available only on stocks approved by SEBI and the exchanges for margin trading, selected based on liquidity and volatility. The list of eligible stocks and their margin requirements can change periodically.
Intraday positions must be squared off the same trading day. MTF positions can be held for an extended period as long as margin requirements are maintained, but unlike intraday trading, MTF carries a daily interest cost on the funded amount.
Yes. Fortune Wealth is a SEBI-registered entity and operates as an authorised person under Motilal Oswal Financial Services.
Considering MTF? Talk to Fortune Wealth First
Speak to a Fortune Wealth relationship manager to understand whether Margin Trade Funding fits your risk appetite before you place a leveraged trade.
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SEBI Disclaimer: Investments in the securities market are subject to market risks. Margin Trade Funding involves leverage, which increases both potential gains and potential losses, and may result in a margin call or forced square-off of your position. Interest is charged on the funded amount for as long as the position remains open. Fortune Wealth is a SEBI-registered entity and operates as an authorised person under Motilal Oswal Financial Services Limited. This content is for informational purposes only and does not constitute investment advice.
