Margin Trade Financing Calculator

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Understanding MTF with an Example

Ms. Sharma wants to invest Rs. 1 Lakh in stocks, however, she only has Rs. 20,000 available with her now.

There are two scenarios: Investing with her own funds and using a Margin Trading Facility (MTF).
 

1. Investing with her own funds (without MTF):
 

Ms. Sharma invests Rs. 20,000 (since she doesn't have the full Rs. 1 Lakh).

If the stocks rise by 10%, her investment becomes Rs. 22,000.

Her profit is Rs. 2,000 (Rs. 22,000 - Rs. 20,000).

 

2. Investing with MTF:

 

Ms. Sharma invests Rs. 20,000 of her own money.

Her stockbroker offers her up to 5x leverage (not available on all stocks) and covers the additional Rs. 80,000, allowing a total investment of Rs. 1 Lakh.

The stockbroker charges a 12% annual interest rate on the services, but we’ll consider the cost for just one month. For Rs. 80,000, one month's interest at 1% (12% annual rate divided by 12 months) is Rs. 800.

If the stock price rises by 10%, the total investment is now worth Rs. 1,10,000.

Her gross profit is Rs. 10,000 (Rs. 1,10,000 - Rs. 1,00,000).

After paying the interest of Rs. 800, her net profit is Rs. 9,200.

 

Comparison of Profits:

 

Without MTF, her profit is Rs. 2,000.

With MTF, even after paying interest, her profit is Rs. 9,200.
 

In summary, by using MTF and paying a small amount of interest, Ms. Sharma increases her profit from Rs. 2,000 to Rs. 9,200.

What is an MTF Calculator?

The MTF Calculator is a handy tool for figuring out the costs involved in margin trading. It includes interest on borrowed funds and other necessary charges. Just enter your margin details to get started.

 

It helps you understand your trading costs easily, taking into account how much you borrow and for how long. It's simpler and more accurate than doing the math yourself.

 

In India, the SEBI requires clear disclosure of all trading charges. The MTF Calculator makes it easy for traders to see these costs and choose the right broker for their needs. It's a quick, free way to make informed trading decisions. 

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Frequently Asked Questions

What are the benefits of choosing Bajaj Broking for margin trading?

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By choosing margin trading with Bajaj Broking, you can enjoy a low-interest rate on your outstanding amount, and pay a small initial amount to hold the position for a year. You can also get four times leverage on the basis of cash and stock in your portfolio.

What are the different plans for margin trading with Bajaj Broking?

Answer Field

You can opt for any one of the three main subscription plans to participate in margin trading. These packs are Freedom Pack, Professional Pack and Bajaj Privilege Club.

What are the interest rates of three MTF plans with Bajaj Broking?

Answer Field

The interest rate for the Freedom Pack is 18%, for the professional Pack 12.5% and for Bajaj Privilege Club even lower interest rates.

What charges are listed by Bajaj Broking brokerage calculator?

Answer Field

Our brokerage calculator details different expenses like brokerage fees, STT, GST, stamp duty, transaction charges and Demat account charges.

What are the advantages of using a brokerage calculator to compute trading expenses?

Answer Field

With a brokerage calculator, you can compute the total expense of your trades. This is a free-to-use tool and gives accurate results instantly. You can also improve your investment strategy by comparing different brokers and making more informed decisions.

How to pledge shares as collateral for MTF?

Answer Field

To commence the process of pledging shares as collateral, you will receive a link from NSDL or CDSL after 6 p.m. on a trading day. Click the link and enter your PAN details. Choose stocks that you plan to pledge as collateral and click on ‘Submit’. Following this, you will receive an OTP, enter it to confirm pledging for MTF.

What are the types of margins in Margin Trading Funds?

Answer Field

There are mainly three types of margins in margin-traded funds. These are mark-to-market margin, extreme loss margin, and VaR margin.

What parameters do I need to enter to calculate brokerage?

Answer Field

To calculate brokerage, you must enter your name, the number of stocks you are purchasing and their current market price.

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