What is MTF (Margin Trading Facility)? How It Works and the Risks
Published 2026-10-15 · Aadarna Stock Broking Pvt. Ltd.
Margin Trading Facility (MTF) lets you buy shares by paying only part of the value yourself. Your broker funds the rest, and you pay interest on the funded amount for as long as you hold the position. The shares you buy are pledged as collateral.
A simple example
Say you want to buy shares worth ₹1,00,000 and the margin requirement for that stock is 25%.
- You pay: ₹25,000
- The broker funds: ₹75,000
- You pay daily interest on ₹75,000 until you sell or bring in the full amount
If the share price rises 10%, your gain on your own ₹25,000 is magnified. If it falls 10%, your loss is magnified in the same way, and you still owe the interest.
Key terms
- Margin requirement: the percentage you must fund yourself. It differs from stock to stock and is set within exchange rules.
- MTF interest: charged daily on the funded amount. Check Angel One's current rate card before using MTF.
- Pledge: shares bought under MTF are pledged to the broker. You'll approve this with an OTP.
- Margin shortfall / call: if prices fall and your margin drops below the required level, you must add funds. If you don't, the broker can sell your shares to recover the amount.
Risks to understand
- Losses are amplified, and you can lose more than your initial contribution.
- Interest keeps adding up whether the stock goes up or down.
- Forced selling can happen at an unfavourable price during a sharp fall.
- Holding for long periods can make interest a large cost.
Who should avoid MTF
- First-time investors still learning how markets move
- Anyone using borrowed or emergency money
- Anyone who can't watch positions and respond quickly to a margin call
MTF is offered by Angel One Ltd. subject to SEBI Circular CIR/MRD/DP/54/2017 dated June 13, 2017 and the Rights & Obligations statement issued by Angel One. Read the terms carefully before activating it.