What is Margin Trading Facility (MTF)?
Margin Trading Facility (MTF) is a financial service provided by GEPL that enables clients to purchase stocks with a reduced initial capital requirement of 50%. The remaining funds necessary for the transaction can be borrowed from GEPL at an interest rate of 18% per annum, allowing clients to leverage their investments and potentially enhance their returns.
Say for instance
Benefit from GEPL’s MTF facility
Invest with 50% of funds in approved stocks
For instance, with an account balance of ₹10,000
GEPL gives 2x buying opportunity, i.e ₹10,000 x 2 = ₹20,000/-
Want to know more?
Margin Trading Facility (MTF): Do's & Don’ts
Do's
- Don't forget to Pledge your purchased shares under MTF within the specified timeline, which is before 9:00 p.m. on the day of purchase
- Trade smartly make an informed decision and choose MTF after conducting thorough research to ensure it aligns with your trading goals.
Don'ts
- Pay Attention to Margin Shortfalls. In the event of a Margin Shortfall, the shares will be squared off within 4 trading days of the occurrence.
- Remember, MTF is a loan, so interest payments are your responsibility. Don't ignore it.
Frequently Asked Questions
The "Margin required" is the initial payment necessary to purchase stocks through margin products. You have the option to pay the margin amount in either cash or by pledging your existing holdings (margin pledge).
An interest rate of 18% p.a. is applicable to the borrowed amount.
As long as you maintain the necessary margin in your account, you have the flexibility to hold your positions under MTF for an extended duration.
Interest is levied starting from the second day after placing an MTF trade until the outstanding amount is settled and/or your position is squared-off
Regarding shares purchased under MTF, the square-off process will occur in the following circumstances:
- If there is a margin shortfall, the shares will be squared-off 4 trading days after the shortfall has taken place.
- If the margin shortfall has not been met within the stipulated time frame.
- If any statutory order is received against the client.
When initiating a request to Pledge or Un-pledge your shares, a charge of Rs 50/- plus GST per scrip is applicable.
As long as you can meet the required margin, you are allowed to enter new positions in Margin Trading.
Upon approval of your MTF request, you will receive the link from CDSL on the same day. Kindly monitor your Email/SMS for communications regarding the initiation of your MTF Pledge Request.
No. Margin Trading Facility is exclusively applicable ONLY for trading in equity
shares.
MTF Disclaimer
If the client is currently utilizing the Margin Trading Facility (MTF) with other brokers, it is necessary for him to inform GEPL before availing of the MTF facility. Failure to provide this information will be considered as the client not availing of the MTF facility from any other financial intermediary.