Margin trading facility (MTF)

MTF lets you buy shares for delivery while paying only part of the price yourself. The broker funds the rest and charges daily interest on it, usually 12% to 18% a year in 2026. The shares bought are pledged to the broker as security until you sell or pay in full.

MTF is regulated by SEBI and is only available on approved stocks. Each stock has its own margin, the share you must pay yourself. On top of interest, most brokers charge pledge fees and MTF brokerage.

Interest runs every calendar day, weekends included. On a trade held for weeks it can cost more than every other charge put together.

Example. Funding ₹2 lakh at 0.04% a day costs ₹80 a day, or ₹2,400 for 30 days.