Normally investors buy and sell stocks with their own money. However, some specific stocks may look attractive at some point in time either because of market conditions or some sector/company specific news. If you don’t have the required funds to trade in a particular stock, you can opt for margin trading facility. Margin trading facility helps you to trade in stocks by borrowing money from your stock broker.
You are required to put in certain percentage as the margin amount (just like a down payment in any loan product). This margin amount will vary from stock to stock. We will fund the rest of the transaction so that you are able to purchase this share. Thus you get the leverage to buy a certain stock even if you don’t have the funds in your trading account.
In the normal trading segment Company allows you to purchase the shares and securities and hold it for a period of T+2+5 days under debit. If the debit in not cleared within T+2+5 days i.e. 7 working days from the day of trade, then your account will be blocked on the 7th day and shares bought for which the debit is due from you shall be liquidated by the Company. But under the Margin Trading Facility (MTF) segment, the client can purchase the shares and hold it for a period beyond 7 days by meeting the required margin.
To know more about MTF and how this facility can be of benefit to you read our MTF FAQ's
To know how to activate the MTF segment on your trading account click here.