Introduction to MTF
Margin Trading Facility (MTF) lets you buy shares by paying only a portion of the total value, while the broker finances the rest. This helps you take larger positions without blocking your entire capital. MTF is commonly used by traders who want to capture opportunities without having their funds tied up in a single trade.
- Increase your market exposure
- Buy high-value stocks with limited capital
- Hold positions for a longer period
- Use borrowed funds to enhance returns
What is an MTF Calculator? (100–120 words)
An MTF Calculator helps you estimate how much funding you will receive from the broker and the cost of using margin. You simply enter the stock price, investment amount, desired quantity, interest rate, and brokerage. The calculator instantly displays the funded amount, your required contribution, and the total charges.
- How much leverage can you use
- The interest you'll pay on the borrowed amount
- Your total cost for holding MTF positions
- Whether the trade fits your capital plan
Understanding MTF: Leverage, Interest & Brokerage Charges
Under MTF, leverage allows you to buy more shares than your available capital permits. The broker finances the remaining portion, and you pay interest on that borrowed amount. Interest is charged daily and depends on the number of days you hold your MTF position. Brokerage is applicable to both 'buy' and 'sell' transactions.
- Leverage – lets you take larger positions
- Interest – calculated daily on the funded value
- Brokerage – paid on executed trades
- Pledging charges – may apply depending on the stock
How MTF Charges Are Calculated?
MTF charges include interest on the funded amount, brokerage on trades, and any applicable regulatory charges. The basic formula is:
Interest = (Funded Amount × Interest Rate × Number of Days) ÷ 365
Example:
If the broker funds ₹80,000 at 12% annual interest for 20 days:
Interest = 80,000 × 12% × 20 ÷ 365 = ₹526
The calculator adds brokerage, GST, SEBI fees, and other costs to show your total MTF charge.
Why Use an MTF Calculator for Margin Trading?
An MTF calculator helps you understand the true cost of using margin before placing a trade. It gives you a clear view of interest costs, the funded amount, and your required contribution.
- Compare funding requirements for different stocks
- Estimate daily interest for holding positions
- Understand how much capital you actually need
- Avoid surprises by knowing the exact charges in advance
How to Use the MTF Calculator: Step-by-Step
To use the MTF Calculator:
- Enter the stock name.
- Enter the quantity.
- Add the current market price.
- Enter the required margin percentage.
- Add the funding amount.
- Select your pack (Freedom Pack or Professional Pack).
- Enter the interest rate.
- Enter the holding period.
After entering these details, the calculator instantly displays:
- Funding amount
- Margin required
- Interest payable
This helps you plan your trades and estimate MTF costs accurately before taking a position.
Benefits of an MTF Calculator
An MTF calculator allows you to plan trades more confidently by revealing the exact cost of using leverage. It helps you:
- Know your upfront contribution
- Estimate interest before entering a trade
- Compare scenarios with different quantities or prices
- Understand whether the trade offers a meaningful return after costs
- Avoid overleveraging by checking affordability
In short, it offers clarity and control when using MTF for equity trading.