Margin Trading Funding (MTF) in RMoney FAQs

Post Date : December 6, 2024

1. What is Margin Trading Funding (MTF)?

Margin Trading Funding (MTF) is a facility offered to investors and traders to enhance their buying power. It allows you to invest in stocks and securities by paying only a portion of the total investment amount, while the broker funds the remaining balance. Clients can provide margin either in cash or by pledging shares as collateral.

2. What are the benefits of MTF?

MTF offers the following advantages:

• Hold delivery positions for extended periods.
• Avoid auto square-off on T+5 days.
• Utilize idle stocks by pledging them as margin for trading.
• Enhance your buying power by up to four times.
• Invest more with limited available cash, capitalizing on market opportunities.
• Diversify your portfolio by investing in a variety of stocks and securities.

3. How is interest calculated?

Interest on MTF is calculated based on the funded amount and the duration for which the position is held. The calculation begins from the exchange pay-in date for settling the transaction and continues until the funds are received. Interest is charged daily, including non-working days.

Example:
Suppose you purchase stocks worth ₹100,000 under MTF:

• Your contribution: ₹25,000
• Margin funded: ₹75,000
• Daily interest on ₹75,000: ₹36.98

4. Can the MTF facility be used for intraday trades?

No, the Margin Trading Funding (MTF) facility is not available for intraday trading.

5. What happens if you fail to maintain the required margin?

If you fail to maintain the required margin while using the MTF facility, your SEBI-registered broker has the right to close your open positions to restore the minimum margin requirement. This process is referred to as liquidation or forced sale.

6. How can you avail of the MTF facility?

You can avail of the MTF facility with RMoney through the following methods:

• Email: Send a request to “askus@rmoneyindia.com” from your registered email ID, asking to activate the MTF facility on your trading account.
• Website: Visit our official website at www.rmoneyindia.com, navigate to the MTF page under the “Products” menu, and submit your request.
• Call: Reach out to your dealer or contact our customer care at 0562-4266600 / 71889007.

7. Am I required to hold separate Demat accounts to avail of the MTF facility?

No, a separate Demat account is not required to avail of the MTF facility.

8.What happens if the shares pledged as collateral appreciate in value?

If the shares pledged as collateral appreciate, the margin derived from these shares will increase. This additional margin can be used to create new positions under the MTF facility.

9. If I purchase stocks under MTF and they appreciate, will I receive additional margin?

No, you will not be eligible for additional margin in case the stocks purchased under MTF appreciate in value.

10. How is the dividend on collateral stocks treated?

Dividends earned on collateral stocks will be credited directly to your registered bank account.

11. Who is eligible to use the MTF facility?

All RMoney clients are eligible to avail of the MTF facility.

12. What Margins will I get for Trading?

As per SEBI guidelines, no margin is offered for trading. However, you can avail of the MTF facility or hedging benefits for margin.