m.Stock Margin Trading Facility (MTF) Explained

Published on Thursday, November 28, 2024 by Chittorgarh.com Team

m.Stock Pay Later (MTF) allows investors to capitalise on investing opportunities without worrying about insufficient funds. This exchange-approved facility enables traders to buy stocks in the delivery segment with only a 20% margin, while the remaining amount is financed by m.Stock.

The Margin Trading Facility (MTF) or Pay Later (MTF) on m.Stock is a product that allows users to buy shares in the market by borrowing a portion of the required investment amount from the broker. This facility is available to m.Stock clients at no additional subscription fees.

Pay only 20% upfront and use the margin to buy shares worth 5x your available capital. With one of the lowest interest rates in the industry and no subscription fee, m.Stock Pay Later (MTF) empowers traders to increase their potential returns.

Key Features of m.Stock Pay Later (MTF) Facility

1. Lowest Interest Rate

   Interest rates start at 6.99% p.a. (for funding above Rs 5 crore), and for up to Rs 5 crore funding, the rate is 9.99% p.a., which is significantly lower than the industry standard of up to 18%.

2. No Limit on Holding Period

   Unlike many brokers that cap the holding period for MTF transactions at 365 days, m.Stock offers unlimited holding period, giving traders the flexibility to hold their positions for as long as needed.

3. High Funding Percentage

   With m.Stock, you can enjoy funding of up to 80% of the stock value, compared to an industry average of 50% - 70%.

4. Over 700 Scrips Available

   Choose from a broad range of over 700 stocks approved for MTF trading.

5. Pre-Pledge for Faster Transactions

   m.Stock allows you to pre-pledge your shares, which streamlines the process and saves on interest rates compared to brokers that follow a post-pledge system.

6. Zero Subscription Fees

   There are no subscription or hidden fees to worry about when using m.Stock Pay Later (MTF) facility. Many competitors charge up to Rs 10,000 as subscription fees, adding extra costs to the trading experience.

7. MTF Calculator

   m.Stock's website offers a free MTF calculator that people can use to calculate their trading potential and brokerage savings.

8. Fills Liquidity Gap

   Traders often miss out on excellent short-term or long-term buying opportunities due to insufficient funds. This gap can be filled with the Pay Later (MTF) Facility.

9. Pledge Charges

   Rs 32 per pledge and unpledge request

10. Brokerage on MTF Trades

    m.Stock charges Rs 20 brokerage per executed order on all MTF trades, making it an attractive option for frequent investors.

How to place a trade in zero capital with Pay Later (MTF)?

Pay Later (MTF) is m.Stock's Margin Trading Facility, which allows you to purchase stocks with just 20% upfront capital. The remaining 80% of the stock value is funded by m.Stock, enabling you to trade larger volumes with minimal capital.

For example, if you wish to buy shares worth Rs 5,00,000, you only need to provide Rs 1,00,000 as cash margin, while the remaining Rs 4,00,000 will be funded by m.Stock. This way, you can make trades with zero capital beyond the initial margin and still hold your position for as long as you want, thanks to the unlimited holding period.

Below you will find the process for buying shares via Pay Later (MTF) on m.Stock trading platforms:

How to buy stocks using MTF on m.Stock?

Buying stocks using the Margin Trading Facility on m.Stock is an easy process:

1. Login to m.Stock Account through mobile app or web platform
2. Search your favourite stocks, if you see a “MTF” tag next to the stock name, click on it and then tap on ‘Buy' to land on the Order Form
3. Select product type - MTF
4. Fill quantity and price details (The margin split will be displayed automatically, allowing you to make informed decisions.)
5. Tap on Buy to pre-pledge the Stocks & place your MTF order:
   • Pledge the selected stocks, following the CDSL process for authentication.
   • Once the pre-pledge process is done, your order gets placed

Example:

• Expected MTF Turnover: Rs 10,00,00,000
• Funding Value is up to 80% of the turnover, so Funding Value = Rs 8,00,00,000.

Key Rates:

• Stock Interest Rate: 6.99% p.a.
• Other Broker Interest Rate: 12%
• Assuming No Subscription Fee for either broker.

Conclusion: By switching to m.Stock, you save Rs 40,08,000 annually compared to using the other broker.

Benefits of m.Stock's MTF Facility

• Increased Return Potential

  Using MTF you can improve your buying power, leading to higher returns on the capital deployed. This is a good option for investors who want to profit.

• Larger Trade & Wider Investment Range

  It enables you to engage in larger trades and explore a broader range of investment opportunities.

• Superior Return on Investment

  With no subscription fee, traders experience higher returns on their investments as their overall costs decrease.

• Clear Tracking

  All MTF positions can be easily tracked under the “Positions” tab on the m.Stock app and web, allowing for real-time monitoring (m.stock MTF).

• User-Friendly Platform Interface

  Trade MTF with just three simple clicks using their quick and user-friendly platform interface.

• Short Term Gain from price movement

  This is a good option for investors who are looking to make profits from short-term price movements.

Combined with zero subscription fee, unlimited holding period, and low interest rates, m.Stock Pay Later (MTF) is an excellent option for investors looking to maximise their capital. Read Pledge Shares using m.Stock.